424B1

This is the initial public offering of our Class A common shares, representing Class A limited liability company interests. No public market currently exists for our Class A common shares. We are offering 21,000,000 Class A common shares. The initial public offering price is $14.00 per Class A common share.

Our Class A common shares have been approved for listing on the New York Stock Exchange, under the symbol “FPH.”

We are an “emerging growth company” as defined under the federal securities laws and are eligible for reduced reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company.”

We have elected to be treated as a corporation for U.S. federal income tax purposes.

Investing in our Class A common shares involves risks. See “Risk Factors” beginning on page 26 to read about factors you should consider before buying our Class A common shares.

We have granted the underwriters an option to purchase up to 3,150,000 additional Class A common shares from us at the initial public offering price less the underwriting discounts and commissions for 30 days after the date of this prospectus to cover over-allotments, if any.

Lennar Homes of California, Inc., an existing stockholder and affiliate of Lennar Corporation, has entered into a securities purchase agreement with us to purchase $100 million of Class A units of Five Point Operating Company, LLC, our operating company, at a price per unit equal to the initial public offering price of Class A common shares in a separate private placement transaction that is expected to close concurrently with this offering. The sale of such units will not be registered under the Securities Act of 1933, as amended.

Funds managed separately by Third Avenue Management LLC and Castlelake, L.P. have indicated an interest in purchasing $30 million and $25 million, respectively, of our Class A common shares in this offering, for an aggregate value of up to $55 million, at the initial public offering price. Because these indications of interest are not binding agreements or commitments to purchase, these funds may elect not to purchase shares in this offering or the underwriters may elect not to sell any shares in this offering to such funds. Any shares not so purchased will be offered by the underwriters to the general public on the same basis as other shares offered in this offering. The underwriters will not receive any underwriting discounts or commissions from the shares purchased by such funds in this offering.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about May 15, 2017 through the book-entry facilities of The Depository Trust Company.

We are responsible for the information contained in this prospectus. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different or additional information, and we take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

We use market data and industry forecasts and projections in this prospectus, particularly in the sections entitled “Prospectus Summary” and “Business and Properties.” We have obtained substantially all of this information from a market study prepared for us in connection with this offering by John Burns Real Estate Consulting, LLC (“JBREC”), an independent research provider and consulting firm focused on the housing industry. A complete copy of the market study prepared by JBREC is also attached to this prospectus as Appendix I. We have agreed to pay JBREC an aggregate fee of $158,000 for that market study, plus an amount charged at an hourly rate for additional information we may require from JBREC from time to time in connection with that market study. Such information is included in this prospectus in reliance on JBREC’s authority as an expert on such matters. Any forecasts prepared by JBREC are based on data (including third-party data), models and experience of various professionals and various assumptions (including the completeness and accuracy of third-party data), all of which are subject to change without notice. See “Experts.” In addition, we have obtained

certain market data and industry forecasts and projections from publicly available information and industry publications. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on industry surveys and the preparers’ experience in the industry and there is no assurance that any of the projected amounts will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus.

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “we,” “us” and “our company” refer to Five Point Holdings, LLC, a Delaware limited liability company, together with its consolidated subsidiaries, after giving effect to the formation transactions effected on May 2, 2016. References in this prospectus to our “communities” refer to the communities that we are developing, including Newhall Ranch in Los Angeles County, The San Francisco Shipyard and Candlestick Point in the City of San Francisco and Great Park Neighborhoods in Orange County. Such references do not include the Treasure Island community in the City of San Francisco or the Concord community in the San Francisco Bay Area. We provide development management services with respect to the Treasure Island and Concord communities for a fee, but we do not have any ownership interest in these communities. See “Business and Properties—Development Management Services.” For additional information about the formation transactions, see “Structure and Formation of Our Company.” Unless otherwise indicated, all share and per share amounts reflect a 1-for-6.33 share split of our Class A common shares and Class B common shares effected on March 31, 2017, and all unit and per unit amounts with respect to the operating company and the San Francisco Venture reflect an equivalent split effected at the same time.

We make statements in this prospectus about being the largest owner and developer of mixed-use, master-planned communities in coastal California. These statements are based on statistics about the total number of residential homesites permitted to be built under existing entitled zoning in the following counties: San Diego, Orange, Los Angeles, Ventura, San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa, Marin, Napa, Sonoma and Solano, which include the ten most populous counties in coastal California.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding whether to invest in our Class A common shares. You should read this entire prospectus carefully, including the “Risk Factors” section and the consolidated financial statements and related notes appearing elsewhere in this prospectus, prior to making an investment decision.

Our Company

We are the largest owner and developer of mixed-use, master-planned communities in coastal California, based on the total number of residential homesites permitted to be built under existing entitled zoning. Our three existing communities have the general plan and zoning approvals necessary for the construction of thousands of homesites and millions of square feet of commercial space, and represent a significant portion of the real estate available for development in three of the most dynamic and supply constrained markets along the California coast—Los Angeles County, San Francisco County and Orange County. These markets exhibit strong long-term housing demand fundamentals, including population and employment growth, coupled with constrained supply of residential land as a result of entitlement challenges and land availability. Our three communities reflect 20 years of strategic positioning stemming from the assets acquired during the tenure of Emile Haddad, our Chairman and Chief Executive Officer, when he served as Chief Investment Officer of Lennar, one of the nation’s largest homebuilders.

We are developing new, vibrant and sustainable communities that, in addition to homesites, include commercial, retail, educational and recreational elements, as well as civic areas, parks and open spaces. We are the initial developer of our three communities that are designed to include approximately 40,000 residential homes and approximately 21 million square feet of commercial space over a period of more than 10 years. Our three mixed-use, master-planned communities are:

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Newhall Ranch: Newhall Ranch consists of approximately 15,000 acres in one of the last growth corridors of northern Los Angeles County. Newhall Ranch is designed to include approximately 21,500 homesites and approximately 11.5 million square feet of commercial space within this community. Newhall Ranch is directly adjacent to our completed, award-winning Valencia master-planned community, where today approximately 20,000 households reside and approximately 60,000 people work.

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The San Francisco Shipyard and Candlestick Point: Located almost equidistant between downtown San Francisco and the San Francisco International Airport, The San Francisco Shipyard and Candlestick Point consists of approximately 800 acres of bayfront property in the City of San Francisco. The San Francisco Shipyard and Candlestick Point is designed to include approximately 12,000 homesites and approximately 4.1 million square feet of commercial space. The San Francisco Venture commenced land development in 2013, and the first homes were sold in April 2015. In November 2014, the San Francisco Venture entered into a joint venture agreement with a subsidiary of The Macerich Company (“Macerich”) to construct an approximately 550,000 square foot urban retail outlet shopping district at Candlestick Point. In November 2016, San Francisco voters approved an initiative measure, Proposition O, to exempt the San Francisco Shipyard and Candlestick Point from restrictions on new office development applicable to all other projects citywide. In 2017, we intend to seek approval from governmental authorities to increase total commercial space (including retail, hotels, artists’ studios, maker space, community uses and schools) in this community from approximately 4.1 million square feet to approximately 6.6 million square feet.

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Great Park Neighborhoods: Great Park Neighborhoods consists of approximately 2,100 acres in Orange County, California, and is being built around the approximately 1,300 acre Orange County Great Park, a metropolitan public park that is under construction and, upon completion, will be nearly twice the size of New York’s Central Park. Great Park Neighborhoods is designed to include approximately 9,500 homesites and approximately 4.9 million square feet of commercial space. The Great Park Venture sold the first homesites in April 2013. As of December 31, 2016, the Great Park Venture had sold 3,866 homesites (including 544 affordable homesites) and commercial land allowing for development of up to 2 million square feet of commercial (research and development) space for aggregate consideration of approximately $1.68 billion.

The scale and positioning of our communities allow us to engage in long-term development, providing numerous opportunities for us to add value for the ultimate residential buyers and commercial owners. In addition, our development activities benefit from our strong relationships and extensive experience working with federal, state and local government agencies and other local constituents to create economically vibrant communities. Our communities promote quality living, with a focus on active lifestyles, diverse populations and an optimal mix of housing and commercial development and employment opportunities.

Our management team has an expansive planning and development skill set, including expertise in managing public-private partnerships and navigating the difficult and complicated entitlement process in California. Key members of our management team have worked together for 10 to 25 years and have overseen the development of our communities from inception. Prior to the formation of the management company in 2009, our management team was an integral part of the team responsible for developing and implementing land strategies on the west coast for Lennar, one of the nation’s largest homebuilders. The collective experience of our team is a key factor in our ability to design and successfully execute the development plans for our communities, and to make new opportunistic investments. Since 2009, our management team has obtained vested tentative tract maps for over 17,000 homesites in our communities. See “Business and Properties—Our Communities—Development Status” for more information regarding the status of our communities’ entitlements.

Our Competitive Strengths

We believe the following strengths will provide us with a significant competitive advantage in implementing our business strategy:

Attractive Locations in Desirable and Supply Constrained California Coastal Markets

Our three communities are located in Los Angeles County, San Francisco County and Orange County, each of which exhibits favorable economic, demographic and employment trends, which are expected to continue to drive future housing demand. All three markets have exhibited strong employment growth, driven in part by exposure to technology sector investment and the Asia-Pacific trade corridor, as evidenced by the ratio of number of jobs added to number of homebuilding permits issued. In 2016, the employment growth-to-homebuilding permits issued ratios were 4.24, 5.45 and 3.66 for Los Angeles County, San Francisco, Marin and San Mateo Counties (collectively, the “Bay Area Counties”), and Orange County, respectively. According to JBREC, household growth is expected to remain a key demand driver through 2019 due to continued population and employment growth. Los Angeles County, the Bay Area Counties and Orange County are expected to experience average annual household growth within a range of 23,900—24,700 households, 7,600—8,000 households, and 11,100—11,200 households, respectively, through 2019. All three markets are also seeing strong demand for commercial space, as evidenced by vacancy rates for office properties declining to 13.4%, 9.4% and 16.0% in Los Angeles County, the Bay Area Counties and Orange County, respectively, in the fourth quarter of 2016. These factors, among others, should continue to drive housing and commercial demand in the coastal California markets where our communities are located. Furthermore, the limited supply of land available for

development in these markets, and the difficult, time consuming and expensive process to obtain new entitlements in California, act as high barriers to entry for competition.

Significant Scale with Favorable Zoning and Entitlements

We believe that our scale, as measured by entitled residential and commercial land, uniquely positions us within the real estate industry on the west coast. We own, or have the right to acquire, substantially all of the undeveloped land in all three of our communities, where we are entitled to build approximately 40,000 residential homes and 21 million square feet of commercial space, which makes us the largest owner and developer of mixed-use, master-planned communities in coastal California. Our existing general plan and zoning approvals give us varying degrees of flexibility in determining the types of homes and commercial buildings that will be constructed, as well as the location of such buildings in different development areas within our communities. As a result, we are able to modify our planning in response to changing economic conditions, consumer preferences and other factors.

Experienced and Proven Leadership

Our Chairman and Chief Executive Officer, Emile Haddad, has worked in the real estate development industry for over 30 years, including as the Chief Investment Officer of Lennar, one of the nation’s largest homebuilders, where he was responsible for land strategy, real estate investments and asset management on the west coast. He is regarded nationally as a leading land expert and a skillful negotiator of complex transactions with competing priorities. Along with Mr. Haddad, key members of our management team, including Erik Higgins, Michael White, Lynn Jochim, Greg McWilliams and Kofi Bonner, along with senior members of the project teams, have worked together for 10 to 25 years on several coastal California communities, including Stevenson Ranch (in Los Angeles County), Windemere (in Contra Costa County) and Coto de Caza (in Orange County), and the acquisition, entitlement, planning and development of all three of our communities. The collective experience of our team is wide-ranging and includes community development, urban and infill redevelopment and military base reuse, enabling us to manage complex entitlements and long-term development projects, and to make new opportunistic investments. We also have demonstrated an ability to successfully re-allocate our management resources as large-scale projects progress. For example, in 2005, our Regional President—Southern California, Mr. McWilliams, relocated from San Francisco to lead Newhall Ranch, and our Executive Vice President, Ms. Jochim, was promoted to lead the San Francisco East Bay, while our Regional President—Northern California, Mr. Bonner, was promoted to head The San Francisco Shipyard and Candlestick Point. In 2006, Ms. Jochim relocated to Orange County to oversee Great Park Neighborhoods.

Expertise in Partnering with Governmental Entities

Our management team has worked with governmental entities on the development of mixed-use, master-planned communities for over 25 years. Our longstanding community relationships and experience help us understand public policy objectives, navigate the complex entitlement process and develop innovative plans that satisfy a wide range of stakeholder objectives. Our commitment to partnering with governmental entities is exemplified by our participation on various boards, committees and councils. For example, Mr. McWilliams serves as Chairman of the Southern California Association of Governments Global Land Use and Economic Council, which has members from 191 cities and six counties, Mr. Bonner serves on the executive committee of the board of the Bay Area Council and as co-chair of the Housing Committee, which drives implementation of strategic policy solutions through political, business and civic leadership, and Ms. Jochim served on the board of the Orange County Business Council. Mr. Haddad has been a part of international delegations and has been a business delegate on the Governor of California’s gubernatorial trade mission to China. Our completed communities provide major public benefits and we are in the process of developing approximately 6,000 units of affordable housing and approximately 10,500 acres of open space, including habitats and wildlife corridors, within our three current communities. We will also continue making significant investments in the development of public infrastructure within our communities,

including schools and parks. An independent economic research and consulting firm has estimated that our three current communities will generate approximately 288,000 jobs during construction, $2.2 billion in state and local tax revenues, $21 billion in labor income and $54.7 billion in economic activity.

Strong Financial Position

We have minimal debt and our assets are generally unencumbered. Upon completion of this offering and the concurrent private placement of Class A units of the operating company to Lennar, we expect to have approximately $431.8 million in cash available to fund the development of our communities, based on cash balances at December 31, 2016. Our communities are at different stages in the development cycle, requiring different levels of capital investment and providing different levels of operating cash flow. As a result, we expect the cash flows from our communities to provide substantial additional capital to fund our development expenditures. With limited availability of financing for land development, we believe our strong financial position gives us an advantage over potential competitors.

Our Business

We are primarily engaged in the business of planning and developing our three mixed-use, master-planned communities, and our principal source of revenue is the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers. We may also retain a portion of the commercial and multi-family properties in our communities as income-producing assets.

Our planning and development process involves the following components:

Master Planning. We design all aspects of our communities, creating highly desirable places to live, work, shop and enjoy an active lifestyle. Our designs include a wide range of amenities, such as high quality schools, parks and recreational areas, entertainment venues and walking and biking trails. Each community is comprised of several villages or neighborhoods, each of which offers a range of housing types, sizes and prices. In addition to the master land planning we undertake for each community, we typically create the floorplans and elevations for each home, as well as the landscape design for each neighborhood, considering each neighborhood’s individual character within the context of the overall plan for the community. For the commercial aspects of our communities, we look for commercial enterprises that will best add value to the community by providing needed services, additional amenities or local jobs. In designing the overall program at each community, we consider the appropriate balance of housing and employment opportunities, access to transportation, resource conservation and enhanced public open spaces and wildlife habitats. We continually evaluate our plans for each community, and make adjustments that we deem appropriate based on changes in local economic factors and other market dynamics.

Entitlements. We typically obtain all discretionary entitlements and approvals necessary to develop the infrastructure within our communities and prepare our residential and commercial lots for construction. We also typically obtain all discretionary entitlements and approvals that the homebuilder or commercial builder will need to build homes or commercial buildings on our lots, although we may from time to time allocate responsibility for obtaining certain discretionary entitlements to a homebuilder or commercial builder. Although we have general plan and zoning approvals for our communities, individual development areas within our communities are at various stages of planning and development and have received different levels of discretionary entitlements and approvals. For additional information about the status of each development area within our communities, see “Business and Properties—Our Communities—Development Status.”

community’s infrastructure and common improvements, including grading and installing roads, sidewalks, gutters, utility improvements (such as storm drains, water, gas, sewer, power and communications), landscaping and shared amenities (such as community buildings, neighborhood parks, trails and open spaces) and other actions necessary to prepare residential and commercial lots for vertical development.

Land Sales. After horizontal development for a given phase or parcel is completed, graded lots are typically sold to homebuilders, commercial builders or commercial buyers. We typically sell homesites to a diverse group of high-quality homebuilders in a competitive process, although in some cases we may negotiate directly with a single homebuilder. In addition to the base purchase price, our residential land sales typically involve participation provisions that allow us to share in the profits realized by the homebuilders. We sell commercial lots to developers through a competitive process or negotiate directly with the buyer. We also regularly assess our development plan and may retain a portion of the commercial and multi-family properties within our communities as income-producing assets.

Vertical Development (Construction). We refer to the process of building structures (buildings or houses) and preparing them for occupancy as “vertical development.” Single-family residences in our communities are built by third-party homebuilders. Commercial buildings in our communities are usually built by a third-party developer or the buyer. For commercial or multi-family properties that we retain, we may construct the building ourselves, or enter into a joint venture with an established developer to construct a particular property (such as a retail development).

Community Programming. Our community building efforts go beyond development and construction. We offer numerous community events, including music, food and art festivals, outdoor movies, educational programs, health and wellness programs, gardening lessons, cooking lessons, food truck events, bike tours and various holiday festivities. For example, at Great Park Neighborhoods, we held a pumpkin carving event that set an official Guinness World Record for the longest line of carved pumpkins. We plan and program all of our events with a goal of building a community that transcends the physical features of our development and connects neighbors through their interests. We believe community building efforts create loyal residents that can become repeat customers within our multi-generational communities.

Sequencing. In order to balance the timing of our revenues and expenditures, we typically sequence the development of individual neighborhoods or villages within our communities. As a result, many of the master planning, entitlement, development, sales and other activities described above may occur at the same time in different locations within a single community. Further, depending on the specific plans for each community and market conditions, we may vary the timing of certain of these phases. Throughout this process, we continually analyze each community relative to its market to determine which portions to sell, which portions to build and then sell, and which portions to retain as part of our portfolio of commercial and multi-family properties.

Our Business Strategy

We are engaged in the business of planning and developing our three mixed-use, master-planned communities. In order to maximize the value of these communities, we intend to:

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actively manage the entitlement, design and development of our communities;

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maximize revenue from the sale or use of residential and commercial land; and

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build our own portfolio of income-producing commercial and multi-family properties.

This business strategy includes the following elements:

Create Active and Connected Communities

We design all aspects of our communities with a view to creating highly desirable places to live, work, shop and enjoy an active lifestyle, and are thereby able to distinguish our communities. Our designs include a wide range of amenities that support activity and connectivity, such as high quality schools, parks and recreational areas, entertainment venues, abundant sidewalks and extensive walking and biking trails. We emphasize lively neighborhoods and the creation of quality public spaces that enhance a vibrant social life. For example, our recreation centers are part of central community hubs that have swimming pools, fitness facilities, indoor/outdoor kitchen and dining areas, sport courts, community rooms, community greenhouses and other community services. In Great Park Neighborhoods, the City of Irvine recently approved a 12,000-seat live music amphitheater to be named “Five Point Amphitheater”, intended to be operated by Live Nation Entertainment, Inc. on a temporary basis until the planning is complete on a permanent amphitheater. Additionally, the City approved a Community Ice Facility at the adjacent Orange County Great Park. The 270,000-square-foot ice facility had a ground-breaking ceremony in February 2017 and will be built, operated and maintained by an affiliate of the National Hockey League’s Anaheim Ducks. It will have three NHL-standard ice rinks and one Olympic size ice rink, and will include a 2,500-seat arena that will be named “Five Point Arena” under a 10-year sponsorship arrangement with us.

Utilize Residential Product Segmentation to Optimize the Pace of Sales

We offer a range of housing types, sizes and prices in neighborhoods within our communities, which are intended to appeal to different segments of homebuyers across a wide range of life phases. We believe our segmentation approach optimizes the pace of homesite sales, which we refer to as “absorption,” and the pricing of homes within our communities because the different product types being sold at any one time are not directly competitive with each other. It also enhances the character of the neighborhoods within our communities, attracting residents of diverse ages and incomes. Within the scope of our existing entitlements, we have the ability to modify the types of homes offered within our communities, and will do so as we deem appropriate to optimize absorption rates and land values. For example, over 40 different model home options are available in Great Park Neighborhoods.

Adjust Neighborhood Composition to Respond to Changing Economic Circumstances

Our master planning is a dynamic process throughout the life cycle of each of our communities. We continually evaluate our plans for each community, and make adjustments based on local economic factors and other market dynamics in order to maximize the value of our underlying land. In addition to changing the types of housing offered, we may offer new amenities, modify the types of commercial development that we undertake or change the particular uses of land parcels within different development areas of a single community. We also manage the timing of our land sales based on market conditions in order to maximize the long-term value of our communities.

Develop an Income-Producing Portfolio

We regularly assess our development plan and may retain a portion of the commercial and multi-family properties in our communities as income-producing assets, rather than selling the land to builders, commercial buyers or homebuyers. The decision to retain any particular property as an income-producing asset (rather than sell it to a developer or commercial user) is a strategic decision that we will make based on a number of factors, including our views about the potential for property appreciation and the opportunity to add value to the community. For example, we may decide to retain a commercial property in order to attract a particular tenant or

group of tenants to the community. In these situations, we may construct the property ourselves or enter into a joint venture with an established developer to construct the property.

Strike a Favorable Balance between Jobs and Housing

We plan our communities with the goal of achieving a desirable balance between jobs and housing. Each of our communities will include a mix of residential and commercial properties, which we expect will generate a significant number of jobs within our communities. We sold approximately 73 net acres in Great Park Neighborhoods to a subsidiary of Broadcom Corporation, which currently has approximately one million square feet of its campus under construction, where its Irvine workforce will be based. At Candlestick Point, we have entered into a joint venture with Macerich to construct an approximately 550,000 square foot outdoor urban outlet mall. At Newhall Ranch, we expect to add approximately 11.5 million square feet of commercial space. The inclusion of office and retail properties enables us to achieve an appropriate balance between jobs and housing within our communities.

Develop Environmentally Conscious Communities

We are, and intend to continue to be, a leader in developing environmentally conscious communities. We are committed to minimizing the impact of our development activities on local infrastructure, resources and the environment. We promote walking and cycling within our communities with extensive paths and trails, and work with local governments to provide convenient access to public transportation. More than half of Newhall Ranch’s homesites will be within walking distance (one-quarter of a mile) of a commercial center. In many cases, we incorporate renewable or repurposed materials in our communities. At Newhall Ranch, we are working with the California Department of Fish & Wildlife and the County of Los Angeles on the “Net Zero Newhall” initiative, a commitment to eliminate Newhall Ranch’s net greenhouse gas emissions through innovations at the community and within the County of Los Angeles, California, as well as funding direct emissions reduction activities. Additionally, at Newhall Ranch, we plan to build an advanced water recycling plant, which will help supply a significant amount of recycled water to our community. At The San Francisco Shipyard and Candlestick Point, our strategy includes measures to conserve energy and reduce the need for fossil fuels. At all of our communities, we endeavor to concentrate our development activities on limited portions of our land in order to maintain substantial portions of open space, which will preserve and protect natural habitat, soils, water and air.

Utilize Alternative Financing Strategies

Taking into account the net proceeds of this offering, we currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan for several years. However, we will continue to utilize multiple public and private financing strategies, including secured mortgage financing for vertical construction projects, community facilities districts (“CFDs”), tax increment financing at The San Francisco Shipyard and Candlestick Point and state and federal grants, to reduce the privately funded portion of total development costs. CFDs are established when local government agencies impose a special property tax on real estate located within a specific district, sell bonds backed by future tax proceeds and use the net proceeds to pay for public improvements, including streets, water, sewage, drainage, electricity, schools, parks and fire and police protection. For tax increment financing, the amount of property tax that a specific district generates is set at a base amount and, as property values increase, property tax growth above that base amount, net of property taxes retained by municipal agencies, is used to fund redevelopment projects within the district.

Diligently Control Costs

minimize the time and costs associated with our development activities. Our experience, combined with the size of our communities, allows us to negotiate favorable terms with suppliers and contractors and keep tight controls over budgets. We typically select suppliers and contractors through a competitive bidding process in which we request proposals from suppliers and contractors that have demonstrated reliable service and quality.

Engage Local Interests

We carefully plan each of our communities to ensure that we are responsive to a variety of local interests. We have worked, and will continue to work, with all stakeholders, including local governments, environmental groups and community members, in the development of our communities. We believe it is important to engage local constituents who may be affected by our development activities in order to anticipate potential concerns and provide mutually beneficial solutions. For example, at Newhall Ranch, we have committed to donate approximately 10,000 acres of natural open space land to public agencies and natural land management organizations and have also established approximately $12 million of endowment funding for native habitat enhancement and long-term conservation. At The San Francisco Shipyard and Candlestick Point, we have a robust community benefits plan designed to satisfy the social goals and objectives of the surrounding neighborhood and the City of San Francisco at large. At Great Park Neighborhoods, we are constructing a wildlife corridor, landscape areas and dozens of sports fields on 688 acres within the Orange County Great Park, which will be accessible to more than 10 million Southern California residents.

Selectively Expand

As strategic opportunities present themselves, including through our relationships with a wide range of governmental entities, we may leverage our unique experience to expand our business in a manner that is consistent with our financial objectives. From time to time, we may acquire additional landholdings and plan and develop new communities.

Our Communities

Newhall Ranch

Newhall Ranch is a mixed-use, master-planned community in Los Angeles County that spans approximately 15,000 acres and is designed to include approximately 21,500 homes, approximately 11.5 million square feet of commercial space, approximately 50 miles of trails, approximately 275 acres of community parks and approximately 10,000 acres of protected open space.

Newhall Ranch is wholly owned by our subsidiary, Newhall Land & Farming, which was originally formed by the family of Henry Mayo Newhall in 1883 to conduct agricultural operations on its landholdings. Newhall Land & Farming was a public company, with shares traded on the New York Stock Exchange (“NYSE”), from 1970 until 2004, when it was acquired by a joint venture between Lennar and LNR Property Corporation (“LNR”). Mr. Haddad (then employed by Lennar) led the acquisition in 2004 and Mr. McWilliams moved from San Francisco to run the joint venture, reporting to Mr. Haddad. Newhall Land & Farming has been operating in California for over 130 years and recently completed the development of Valencia, a mixed-use, master-planned community directly adjacent to Newhall Ranch, which it began developing in the 1960s. Valencia is one of the premier mixed-use, master-planned communities in the nation and the regional center for north Los Angeles County, with approximately 20,000 homes and approximately 25 million square feet of commercial and industrial space. As a result of a comprehensive master-plan, Valencia is a balanced, sustainable community with top-rated primary and secondary schools, two higher education institutions, 15 parks, approximately 3,000 acres of open space, three golf courses, quality health care including a community hospital and trauma center,

convenient public services and dynamic choices in shopping and entertainment. Valencia has received a number of prestigious awards including multiple “Top 10 Master Planned Communities in the Nation” (JBREC), multiple “Top 10 Safest City in the Nation” (FBI statistics) and a “Best Place to Live in California” (CNN Money Magazine), which are a testament to the vision and thoughtful planning that was the inspiration for Valencia from the start.

Newhall Ranch, our new mixed-use, master-planned community, is directly adjacent to Valencia and will provide homes, employment, schools, shopping, public services and cultural and recreational amenities. Newhall Ranch will include a broad range of housing types, from apartments and live-work lofts to single-family attached and detached homes of all sizes.

Newhall Ranch will continue the tradition of excellence in community planning established by Valencia as it meets the needs of a growing population in Los Angeles County. With an ideal location near existing jobs and infrastructure, and the planned addition of approximately 11.5 million square feet of commercial space, Newhall Ranch is expected to be a regional commercial and entertainment center. At Newhall Ranch, we plan to build five elementary schools, a junior high school, a senior high school, four fire stations, a sheriff’s station and a public library.

The San Francisco Shipyard and Candlestick Point

The San Francisco Shipyard and Candlestick Point, located on approximately 800 acres of bayfront property in the City of San Francisco, is designed to include approximately 12,000 homesites, approximately 4.1 million square feet of commercial space, approximately 100,000 square feet of community space, artist studios and approximately 355 acres of parks and open space. In 2017, we intend to seek approval from governmental authorities to increase total commercial space (including retail, hotels, artists’ studios, maker space, community uses and schools) in this community from approximately 4.1 million square feet to approximately 6.6 million square feet.

The San Francisco Shipyard and Candlestick Point consists of two distinct, but contiguous, parcels of real estate. The San Francisco Shipyard, the northern parcel, consists of approximately 495 acres on the former site of the Hunters Point Navy Shipyard, located along San Francisco’s southeast waterfront. The Hunters Point Navy Shipyard was operated by the U.S. Navy from the late 1930s until 1974, when it was placed in industrial reserve. Candlestick Point, the southern parcel, is located directly south of The San Francisco Shipyard and consists of approximately 280 acres on San Francisco’s waterfront. This nationally recognized site was the location of Candlestick Park stadium, former home of the San Francisco 49ers and the San Francisco Giants.

In 1999, the predecessor of the San Francisco Venture, led by Mr. Haddad and Mr. McWilliams (both of whom were then employed by Lennar), was selected by the City and County of San Francisco to enter into an exclusive negotiation agreement with the City and County of San Francisco for The San Francisco Shipyard. These negotiations led to execution of an initial disposition and development agreement for portions of The San Francisco Shipyard in 2003, and a second disposition and development agreement covering Candlestick Point and the remaining development areas within The San Francisco Shipyard in 2010. Pursuant to a conveyance agreement between the U.S. Navy and the former San Francisco Redevelopment Agency, the U.S. Navy has an obligation to complete its finding of suitability to transfer process and obtain concurrence from the U.S. Environmental Protection Agency (“USEPA”) and state environmental regulators that the property is suitable for the intended use prior to conveying parcels of land within The San Francisco Shipyard to the former San Francisco Redevelopment Agency. The finding of suitability to transfer process replaces many local approval requirements. For additional information about the finding of suitability to transfer process, see “Business and Properties—Regulation—FOST Process.” The initial land transfer of approximately 75 acres within The San Francisco Shipyard took place in 2005. With respect to Candlestick Point, the San Francisco Venture took title to approximately 70 acres in December 2014. The balance of both properties is expected to be conveyed to us in

accordance with the disposition and development agreements over the next several years, although it is possible that delays relating to environmental investigation and remediation could slow the transfers. In 2005, Mr. Bonner joined the team to oversee The San Francisco Shipyard and Candlestick Point, reporting to Mr. Haddad.

Our plan for The San Francisco Shipyard and Candlestick Point includes approximately 12,000 residential homesites divided among ten separate development areas. While all homes in this community are expected to be attached homes, we believe our plan offers a diverse mix of residential product offerings, with price points that will appeal to a wide range of prospective residents and homebuyers.

In November 2014, the San Francisco Venture entered into a joint venture agreement with Macerich to construct an approximately 550,000 square foot urban retail outlet shopping district at Candlestick Point. The interest in this venture currently is owned by a Lennar joint venture which, when the mall is completed, will be transferred to the San Francisco Venture in exchange for Class A units in the operating company. This shopping district will be one of the most significant retail developments in San Francisco in recent years and will anchor the Candlestick Point community. This unique urban outlet concept is anticipated to include a large collection of diverse retail tenants catering to residents in the region as well as tourists. In addition to the shopping district being developed in partnership with Macerich, the surrounding area is planned to include housing, neighborhood retail stores, restaurants, a film and arts center building and a hotel.

Construction of the urban retail outlet shopping district at Candlestick Point commenced in 2015 with the demolition of the stadium and other infrastructure work.

Vertical construction is expected to commence in 2019 and the retail district is expected to open to customers in 2021. In 2011, the Brookings Institution named The San Francisco Shipyard and Candlestick Point project as one of three transformative investments in the United States. Also, in 2011, the project was awarded the Gold Nugget award at the Pacific Coast Builders Conference for the best “on the boards” site plan, an award honoring site design. In 2016, we won the Excellence in Business Award from the San Francisco Chamber of Commerce.

The San Francisco Venture built the initial homes at The San Francisco Shipyard and Candlestick Point. As of May 2, 2016, the San Francisco Venture had sold 107 homes (including 9 affordable homes) and entered into contracts to sell 73 additional homes (including 11 affordable homes) for total aggregate consideration of approximately $117.4 million. On May 2, 2016, the San Francisco Venture transferred to the Lennar-CL Venture approximately 75.5 acres of land where homes are currently being built (the “Phase 1 Land”), as well as all responsibility for current and future residential construction on the Phase 1 Land. See “Certain Relationships and Related Party Transactions—San Francisco Venture Transactions.” We are not entitled to any of the proceeds from future sales of homes on the Phase 1 Land (although we will receive a marketing fee for each home sold). For additional information about the land that was transferred to the Lennar-CL Venture and the land that was retained by the San Francisco Venture, see “Business and Properties—The San Francisco Shipyard and Candlestick Point—Development Status.”

We have entered into an agreement with the Lennar-CL Venture pursuant to which the Lennar-CL Venture has agreed to transfer to us entitlements for at least 172 homesites and at least 70,000 square feet of retail space for use in the development of other portions of The San Francisco Shipyard and Candlestick Point. See “Certain Relationships and Related Party Transactions—Entitlement Transfer Agreement.”

Great Park Neighborhoods

Great Park Neighborhoods is an approximately 2,100 acre mixed-use, master-planned community in Orange County that is designed to include approximately 9,500 homesites (including up to 1,056 affordable homesites), approximately 4.9 million square feet of commercial space, approximately 61 acres of parks and approximately 138 acres of trails and open space. Great Park Neighborhoods is adjacent to the Orange County Great Park, a metropolitan public park that will be nearly twice the size of New York’s Central Park upon completion.

Adjacent to the highly regarded master-planned Irvine Ranch communities, Great Park Neighborhoods is being developed on the former site of the El Toro Marine Corps Air Station (the “El Toro Base”), which was first commissioned by the U.S. Marine Corps in 1943 and operated until 1999, when it was decommissioned as an active base. In July 2005, the U.S. Navy auctioned the El Toro Base as four separate parcels of land and the Great Park Venture, under the direction of Mr. Haddad (then employed by Lennar), prevailed at the auction and purchased all four parcels. The U.S. Navy has an obligation to complete its finding of suitability to transfer process prior to conveying land to the Great Park Venture and all of the revenue producing portions of the Great Park Neighborhoods acreage have been delivered by the U.S. Navy to the Great Park Venture. In connection with the acquisition, the Great Park Venture also entered into a development agreement with the City of Irvine, which marked the end of fifty-six years of military history and the beginning of a unique partnership with the City of Irvine. In 2006, Ms. Jochim, our Executive Vice President, relocated from San Francisco, where she was handling land operations for Lennar, to lead the redevelopment of the El Toro Base, reporting to Mr. Haddad.

The first homesites were sold in April 2013 and, as of December 31, 2016, the Great Park Venture had sold 3,866 homesites (including 544 affordable homesites) and commercial land allowing for development of up to 2 million square feet of commercial (research and development) space for aggregate consideration of approximately $1.68 billion. In January 2015, Pavilion Park at Great Park Neighborhoods was named “Master Planned Community of the Year” in the United States by the National Association of Homebuilders. This award recognizes outstanding performance in residential real estate sales, marketing and design.

Industry Overview

California Housing Market

The California economy is highly diverse and driven by a variety of industries, including agriculture, tourism, military operations, trade, technology and real estate. The California residential housing markets are significantly more supply constrained than those in many other regions in the country. Many residents prefer to live near the 800+ miles of coastline in the state, keeping real estate prices amongst the highest in the nation. The relatively close proximity to Asia also contributes to increased housing demand in coastal cities. Many of the leading software and internet companies, and the venture capital firms that fund them, are concentrated in the Silicon Valley area. This technology corridor, which includes the headquarters of Google Inc., Apple Inc., and Facebook, Inc., runs from San Francisco in the north to San Jose in the south and includes several cities with the highest per capita GDP in the world (according to The Brookings Institute). Southern California also has a growing technology industry in both Los Angeles County and Orange County. Technology jobs typically pay above the average income, and, when mixed with supply constrained markets, are putting upward pressure on home prices.

In 2016, the employment growth-to-building permit ratios far exceeded the jobs-to-household ratios, supporting strong home price appreciation through demand that exceeds supply. In coastal California, home prices have appreciated faster than the national average, primarily due to homebuilders’ inability to supply enough new homes to meet demand, land shortages and lengthy entitlement times. Resale supply within Los Angeles County, Orange County and the Bay Area Counties remains well below the national average of 4.4 months.

While California experienced a significant economic downturn during the recession, the state has recovered appreciably. Unemployment continues to decrease in California. According to the Bureau of Labor Statistics, as of October 2016, the California unemployment rate was 5.2%, significantly lower than the peak of 12.2% reached in 2010. According to the National Association of Home Builders, as of February 28, 2017, year to date total single family building permits in California had increased approximately 12% over the prior year.

Los Angeles County Housing Market

Housing demand in Los Angeles County currently exceeds new supply being added to the market, as evidenced by an employment growth-to-homebuilding permits issued ratio of 4.24 in 2016 (well above the typical balance market ratio of 2.6). As of December 2016, the median single-family detached existing home price had reached $545,000, an increase of 5.8% over the prior year, and the median new home price had reached $574,000, an increase of 2.3% over the prior year, and above the prior peak reached in 2007. Resale home values grew 6.8% in the twelve months ended December 2016. As of December 2016, only 17,536 homes were listed on the market in Los Angeles County, which equates to only 2.7 months of supply (well below the typical equilibrium of 6.0 months). During 2015, commercial office space vacancy rates dropped below 15% for the first time since 2009, reaching 14.2%, and declined even further through the fourth quarter of 2016, to 13.4%. Commercial asking rents per square foot have trended upward gradually since bottoming in 2010.

Bay Area Counties Housing Market

Housing demand in the Bay Area Counties currently exceeds new supply being added to the market, as evidenced by an employment growth-to-homebuilding permits issued ratio of 5.45 for 2016 (well above the typical balanced market ratio of 2.6). As of December 2016, the median existing home price reached an all-time high of $1,148,100, and the median new home price was $1,020,400, reflecting a 16.4% decrease from the prior year. New home prices in this environment of compressed new home sales volume can be heavily influenced by

the mix of home types being sold at any given time. As a result, resale home prices are a better indication of housing market trends in the metropolitan area. As of December 2016, only 1,070 homes were listed on the market, which equates to only 0.9 months of supply (well below the typical equilibrium of 6.0 months). In the fourth quarter of 2016, commercial office space vacancy decreased to 9.4%, from 15.5% in 2010, and commercial asking rents per square foot increased to $58.28, from $36.34 in 2010.

Orange County Housing Market

Housing demand in Orange County currently exceeds new supply being added to the market, as evidenced by an employment growth-to-homebuilding permits issued ratio of 3.66 in 2016 (well above the typical balanced market ratio of 2.6). As of December 2016, the median single-family detached existing home price had reached $700,000, an increase of 4.5% over the prior year, and the median new home price was $835,000, a decrease of 2.5% from the prior year. During the twelve months ended December 2016, new home sales increased to 4,689, an increase of 28.9% from the prior year. As of December 2016, only 6,939 homes were listed on the market, which equates to only 2.5 months of supply (well below the typical equilibrium of 6.0 months). In the fourth quarter of 2016, commercial office space vacancy decreased to 16.0%, from 20.8% in 2010, and commercial asking rents per square foot increased to $31.70, from a low of $26.46 in 2010.

Structure and Formation of Our Company

Background and Overview

Before forming our management company, our Chairman and Chief Executive Officer, Emile Haddad, was the Chief Investment Officer of Lennar, one of the nation’s largest homebuilders. For a period of over 20 years, Mr. Haddad worked closely with the leadership at Lennar headed by its Chief Executive Officer, Stuart Miller, and Chief Operating Officer, Jon Jaffe, focusing on land strategy and real estate investments on the west coast. Throughout this period, this team recognized at least three major demographic trends that favored significant population growth in coastal California: (i) baby boomers are retiring and seeking a more active lifestyle than previous generations of retirees; (ii) members of Generation Y increasingly seek a 24 hour lifestyle and a coastal presence; and (iii) affluent immigrants, who represent a significant portion of the growth in population, seek to locate in California and value education. Mr. Haddad helped Lennar take advantage of these trends by building a specialized team that focused on acquiring interests in large tracts of available land in Los Angeles, San Francisco and Orange Counties, particularly the highly desirable coastal areas to which the demographic trends were pointing. These opportunities included Navy base conversions in large infill locations and large mixed-use communities in otherwise existing urban markets. At each of these locations, the plan was to build communities that promote quality living, with a focus on active lifestyles, diverse populations and an optimal mix of housing and commercial development and employment opportunities.

In 2009, our company was formed (under the name “Newhall Holding Company, LLC”) to acquire ownership of Newhall Land & Farming. The management company was formed as a joint venture between Mr. Haddad and Lennar to manage the properties owned by Newhall Land & Farming, and to pursue similar development opportunities. Our management team was an integral part of the team in charge of developing and implementing land strategies on the west coast for Lennar prior to the formation of our management company in 2009. Key members of our management team have led the acquisition, entitlement, planning and development of all three of our communities since their inception. Our management team also has long-standing relationships with our principal equityholders, including Lennar.

In May 2016, we completed the formation transactions to combine the management company with ownership of our three California communities. In the formation transactions, among other things:

•

we acquired an interest in, and became the managing member of, the San Francisco Venture;

•

the limited liability company agreement of the San Francisco Venture was amended and restated to provide for the possible future exchange of the remaining interests in the San Francisco Venture for interests in the operating company;

•

we acquired a 37.5% percentage interest in the Great Park Venture, and we became the administrative member of the Great Park Venture; and

•

we acquired the management company, which has historically managed the development of Great Park Neighborhoods and Newhall Ranch.

As a result of the formation transactions, we now own interests in, and manage the development of, Newhall Ranch, The San Francisco Shipyard and Candlestick Point and Great Park Neighborhoods. The diagram below presents a simplified depiction of our current organizational structure:

LOGO

(1)

Lennar and its wholly owned subsidiaries own 23,981,655 Class A units of the operating company (approximately 32.0% of the outstanding Class A units), which will increase to 31,124,512 Class A units upon completion of the concurrent private placement to Lennar. Mr. Haddad owns 3,137,134 Class A units of the operating company (approximately 4.2% of the outstanding Class A units). See “— Principal Equity Holders” below.

(2)

We own all of the outstanding Class B units of the San Francisco Venture. The Class A units of the San Francisco Venture, which we do not own, are intended to be substantially economically equivalent to Class A units of the operating company. As the holder of all outstanding Class B units, we are entitled to receive 99% of available cash from the San Francisco Venture after the holders of Class A units have received distributions equivalent to the distributions, if any, paid on Class A units of the operating company. See “—The San Francisco Venture” below.

(3)	Lennar and its wholly owned subsidiaries own 25,648,648 Class A units of The San Francisco Venture (approximately 68.4% of the outstanding Class A units). See “— Principal Equity Holders” below.

(4)	We own a 37.5% percentage interest in the Great Park Venture. However, holders of legacy interests in the Great Park Venture are entitled to receive priority distributions in an amount equal to $565 million. See “—The Great Park Venture” below.

(5)

Lennar and its wholly owned subsidiaries own a 25.0% legacy interest in the Great Park Venture and an indirect interest in FPC-HF (which owns a 12.5% legacy interest in the Great Park Venture). Mr. Haddad owns an indirect interest in FPC-HF (which owns a 12.5% legacy interest in the Great Park Venture). See “— Principal Equity Holders” below.

For more information about the formation transactions, see “Structure and Formation of Our Company.”

Our Company

The company has two classes of shares outstanding: Class A common shares and Class B common shares. Holders of our Class A common shares and holders of our Class B common shares are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders, and are both entitled to receive distributions at the same time. However, the distributions paid to holders of our Class B common shares are in an amount per share equal to 0.0003 multiplied by the amount paid per Class A common share. The Class B common shares were issued in the formation transactions to accredited investors (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) who owned or acquired Class A units in the operating company or Class A units in the San Francisco Venture, with each investor entitled to purchase one Class B common share for each such unit. The aggregate purchase price for all Class B common shares issued in the formation transactions was $470,449. See “Description of Shares” for a more complete description of our Class A common shares, our Class B common shares and our operating agreement.

U.S. Federal Income Tax Status as a Corporation

We have elected to be treated as a corporation for U.S. federal income tax purposes. As a result, an owner of our shares does not report our items of income, gain, loss and deduction on its U.S. federal income tax return, nor does an owner of our shares receive a Schedule K-1. Our shareholders are not subject to state income tax filings in the various states in which we conduct operations as a result of owning our shares. Distributions on our shares are treated as dividends on corporate stock for U.S. federal income tax purposes to the extent of our current and accumulated earnings and profits, and are reported on Form 1099, to the extent applicable.

The Operating Company

We are the sole operating managing member of the operating company and, as of December 31, 2016, we owned approximately 50.4% of the outstanding Class A units of the operating company. We will contribute the net proceeds of this offering to the operating company, and as a result will own approximately 57.1% of the outstanding Class A units of the operating company immediately following completion of this offering and the concurrent private placement of Class A units of the operating company to Lennar (58.3% if the underwriters exercise their over-allotment option in full). We conduct all of our businesses in or through the operating company, which owns, directly or indirectly, equity interests in, and controls the management of, Newhall Land & Farming, the San Francisco Venture and the management company. Through a wholly owned subsidiary, the operating company owns a 37.5% percentage interest in, and serves as the administrative member of, the Great Park Venture.

Our interest in the operating company entitles us to share in cash distributions from, and in the profits and losses of, the operating company on a pro rata basis in accordance with our ownership. As the sole operating managing member of the operating company, we exercise exclusive and complete responsibility and discretion in the day-to-day management and control of the operating company, subject to certain limited exceptions, which are described more fully in “The Limited Liability Company Agreement of the Operating Company.” Our board of directors manages the business and affairs of our company by directing the affairs of the operating company.

After a 12 month holding period, holders of Class A units of the operating company may exchange their units for, at our option, either (1) our Class A common shares on a one-for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events), or (2) cash in an amount equal to the market value of such shares at the time of exchange. Whether such units are acquired by us in exchange for our Class A common shares or for cash, if the holder also owns our Class B common shares, then an equal number of that holder’s Class B common shares will

automatically convert into our Class A common shares, at a ratio of 0.0003 Class A common shares for each Class B common share. With each exchange of Class A units of the operating company, our percentage ownership interest in the operating company and our share of the operating company’s cash distributions and profits and losses will increase.

The San Francisco Venture

We are the manager of the San Francisco Venture and thereby exercise all management powers over its business and affairs. The San Francisco Venture has two classes of units—Class A units and Class B units. All of the outstanding Class A units are owned by affiliates of Lennar and affiliates of Castlelake, L.P. (“Castlelake”). We own all of the outstanding Class B units of the San Francisco Venture.

The Class A units of the San Francisco Venture are intended to be substantially economically equivalent to the Class A units of the operating company. Cash generated by the San Francisco Venture is distributed to holders of Class A units and Class B units as follows: (1) first, to the holders of Class A units until they have received an amount per unit equal to the amount of distributions paid on a Class A unit of the operating company; (2) second, to the holders of Class B units until they have received an amount per unit equal to the amount of distributions paid on a Class A unit of the operating company; and (3) third, 1% to the holders of Class A units (subject to proportionate reduction as and to the extent that Class A units are exchanged or redeemed), and the remainder (initially 99%) to the holders of Class B units.

Holders of Class A units of the San Francisco Venture can redeem their units at any time and receive Class A units of the operating company on a one-for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events). If a holder requests a redemption of Class A units that would result in our ownership of the operating company falling below 50.1%, subject to certain exceptions, we may elect to satisfy the redemption with our Class A common shares in lieu of Class A units of the operating company. We also have the option, at any time, to acquire outstanding Class A units of the San Francisco Venture in exchange for Class A units of the operating company. The 12 month holding period for any Class A units of the operating company issued in exchange for Class A units of the San Francisco Venture is calculated by including the period that such Class A units of the San Francisco Venture were owned by the exchanging holder.

The Great Park Venture

The Great Park Venture has two classes of interests—percentage interests and legacy interests. The owners of the Great Park Venture immediately prior to the formation transactions hold all of the legacy interests, which entitle them to receive priority distributions in an aggregate amount equal to $565 million. After the priority distributions have been fully paid, all remaining cash will be distributed to the holders of the percentage interests. We have a 37.5% percentage interest in the Great Park Venture and no legacy interest.

We are the administrative member of the Great Park Venture. Management is vested in the four voting members, who have a total of five votes. Major decisions generally require the approval of at least 75% of the votes of the voting members. We have two votes, and the other three voting members each have one vote, so we are unable to approve any major decision without the consent or approval of at least two of the other voting members.

The Management Company

FP Inc., a wholly owned subsidiary of the operating company, is the general partner of FP LP. As the general partner, FP Inc. has the sole right to manage and control FP LP, thereby giving the operating company control and discretion over the day-to-day management of the entity. The operating company owns all of the outstanding

Class A partnership interests in FP LP. All of the outstanding Class B partnership interests in FP LP are owned by Mr. Haddad, Lennar and FPC-HF. The operating company, as the holder of all outstanding Class A partnership interests in FP LP, is entitled to receive all distributions paid by FP LP, except that holders of Class B partnership interests in FP LP are entitled to receive distributions equal to the amount of any incentive compensation payments under the amended and restated development management agreement that are attributable to payments on legacy interests in the Great Park Venture. For additional information about the amended and restated development management agreement, see “Business and Properties—Development Management Services.”

Principal Equity Holders

Pro Forma Equity Ownership

The following table sets forth information regarding the beneficial ownership of our Class A common shares on a fully diluted basis immediately following completion of this offering and the concurrent private placement of Class A units of the operating company to Lennar. The percentage of beneficial ownership after this offering set forth below is based on 112,450,578 Class A common shares issued and outstanding on a fully diluted basis as of March 31, 2017 (and 140,595,578 Class A common shares immediately after this offering, assuming no exercise by the underwriters of their over-allotment option).


Equity Holder	% of all Class A Common Shares
Emile Haddad (1)		2.4	%
Lennar (2)		41.0	%
Anchorage Capital Master Offshore, Ltd.		7.0	%
Castlelake, L.P. (3)		16.3	%
Investors in this offering		14.9	%
Other investors		18.4	%

Total		100	%

(1)

Represents the following equity interests, which are held by Mr. Haddad: (A) 304,760 Class A common shares, (B) 3,137,134 Class B common shares and (C) 3,137,134 Class A units of the operating company. Mr. Haddad also owns a 35.0% Class B limited partnership interest in FP LP, an indirect interest in FPC-HF (which owns a 12.5% Class B limited partnership interest in FP LP and a 12.5% legacy interest in the Great Park Venture) and 869,734 restricted share units (“RSUs”).

(2)

Represents the following equity interests, which are held by Lennar and its wholly owned subsidiaries: (A) 858,034 Class A common shares, (B) 56,773,160 Class B common shares, (C) 31,124,512 Class A units of the operating company and (D) 25,648,648 Class A units of the San Francisco Venture. Lennar and its wholly owned subsidiaries also own a 52.5% Class B limited partnership interest in FP LP, a 25.0% legacy interest in the Great Park Venture and an indirect interest in FPC-HF (which owns a 12.5% Class B limited partnership interest in FP LP and a 12.5% legacy interest in the Great Park Venture).

(3)

Represents the following equity interests, which are held by Castlelake and its affiliates: (A) 3,910,858 Class A common shares, (B) 18,932,182 Class B common shares, (C) 7,101,625 Class A units of the operating company and (D) 11,830,557 Class A units of the San Francisco Venture. Castlelake and its affiliates also own an interest in FPC-HF (which owns a 12.5% Class B limited partnership interest in FP LP and a 12.5% legacy interest in the Great Park Venture).

Please see “Principal Shareholders,” “Description of Shares, “The Limited Liability Company Agreement of the Operating Company” and “The Operating Agreement of the San Francisco Venture” for more information.

Relationship with Lennar

We have a long-standing relationship with Lennar. Prior to the formation transactions, Lennar owned equity interests in us, the San Francisco Venture, the Great Park Venture and the management company. Key members of our management team have previously worked for Lennar and Lennar has also managed the San Francisco Venture. Lennar is our largest investor and owned, as of December 31, 2016, approximately 45% of our outstanding Class A common shares on a fully diluted basis. See “—Principal Equity Holders.” In the concurrent private placement, Lennar has agreed to purchase $100 million of additional Class A units of the operating company at a price per unit equal to the initial public offering price per Class A common share, and an equal number of our Class B common shares at a price of $0.00633 per share. See “Certain Relationships and Related Party—Lennar Share Purchase Agreement.” We are providing development management services for Lennar with respect to the Treasure Island and Concord communities and the property owned by the Lennar-CL Venture, each of which is in California. In addition, three of our directors are executive officers of Lennar, and we sometimes sell land to Lennar. For additional information about transactions with Lennar, see “Certain Relationships and Related Party Transactions—Other Transactions with Lennar” and “Risk Factors.”

Company Information

We were formed as a Delaware limited liability company on July 21, 2009 under the name “Newhall Holding Company, LLC,” and our name was changed to “Five Point Holdings, LLC” on May 2, 2016. Our principal executive offices are located at 25 Enterprise, Suite 300, Aliso Viejo, California 92656, and our telephone number is (949) 349-1000. We also maintain an internet site at www.fivepoint.com. Our website and the information contained therein or connected thereto is not incorporated, or deemed to be incorporated, into this prospectus or the registration statement of which it forms a part.

Summary Risk Factors

An investment in our Class A common shares involves substantial risks and uncertainties that may adversely affect our business, financial condition, results of operations and cash flows. Some of the more significant challenges and risks relating to an investment in our Class A common shares include, among other things, the following:

•

Our performance is subject to risks associated with the real estate industry.

•

There are significant risks associated with our development and construction projects that may prevent completion on budget and on schedule.

•

Zoning and land use laws and regulations may increase our expenses, limit the number of homes or commercial square footage that can be built or delay completion of our projects and adversely affect our financial condition and results of operations.

•

We incur significant costs, and may be subject to delays, in obtaining entitlements, permits and approvals before we can begin development or construction of our projects and begin to recover our costs.

•

We will have to make significant investments at our properties before we realize significant revenues.

•

Our projects are subject to environmental planning and protection laws and regulations that require us to obtain permits and approvals that may be delayed, withheld or challenged by third parties in legal proceedings.

•

As an owner and operator of real property, we could incur liability for environmental contamination issues.

•

Our projects are all located in California, which makes us susceptible to risks in that state.

•

We may from time to time be subject to litigation, which could have a material adverse effect on our financial condition and results of operations.

•

Inflation may adversely affect us by increasing costs that we may not be able to recover.

•

Our property taxes could increase due to rate increases or reassessments, which may adversely impact our financial condition and results of operations.

•

We depend on key personnel.

•

As a holding company, we are entirely dependent upon the operations of the operating company and its ability to make distributions to provide cash flow to us or to pay taxes and other expenses.

•

Some of our directors are involved in other businesses including real estate activities and public or private investments and, therefore, may have competing or conflicting interests with us.

•

We may have assumed unknown liabilities in connection with the formation transactions, which, if significant, could adversely affect our financial condition and results of operations.

•

We will be required to pay certain investors for certain expected tax benefits.

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Our ability to utilize our net operating loss carryforwards and other tax attributes may be limited if we undergo an “ownership change.”

•

The obligations associated with being a public company will require significant resources and management attention.

•

We will need additional capital to execute our development plan, and we may be unable to raise additional capital on favorable terms.

Implications of Being an Emerging Growth Company

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:

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an exemption to include in an initial public offering registration statement less than five years of selected financial data;

•

an exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting; and

•

reduced disclosure about the emerging growth company’s executive compensation arrangements.

The JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have not elected to avail ourselves of the exemption that allows emerging growth companies to extend the transition period for complying with new or revised financial accounting standards. This election is irrevocable.

We will remain an emerging growth company until the earliest of:

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the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion;

•

the end of the fiscal year following the fifth anniversary of the date of the first sale of our common shares, pursuant to an effective registration statement filed under the Securities Act;

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the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period; and

•

the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”) or any successor statute, which requires, among other things, that the market value of our common shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

We have availed ourselves in this prospectus of the reduced reporting requirements described above with respect to selected financial data and executive compensation disclosure requirements. As a result, the information that we provide shareholders in our filings with the Securities and Exchange Commission (the “SEC”) may be different than what is available with respect to many other public companies. If some investors find our Class A common shares less attractive as a result of our reliance on these exemptions, there may be a less active trading market for our Class A common shares and our share price may be adversely affected. When we are no longer deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

This Offering

Class A common shares offered by us

21,000,000 shares (24,150,000 shares if the underwriters exercise their over-allotment option in full)

Class A common shares to be outstanding immediately after completion of this offering

58,426,008 shares (61,576,008 shares if the underwriters exercise their over-allotment option in full)

Class A common shares to be outstanding immediately after completion of this offering and the concurrent private placement, on a fully diluted basis

139,913,880 shares (143,063,880 shares if the underwriters exercise their over-allotment option in full)

Class B common shares to be outstanding immediately after completion of this offering and the concurrent private placement

81,463,433 shares

Use of proceeds

We estimate that the net proceeds of this offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $269.4 million, or approximately $310.7 million if the underwriters exercise their over-allotment option in full.

Net proceeds to the operating company from the concurrent private placement will be $100 million.

We will contribute the net proceeds from this offering to the operating company in exchange for Class A units of the operating company. We expect the operating company to use all of the net proceeds received from us and from the concurrent private placement to fund our development activities and for other general corporate purposes.

See “Use of Proceeds.”

Risk factors

Investing in our Class A common shares involves a high degree of risk. See “Risk Factors” for a discussion of some of the factors you should carefully consider before deciding to invest in our Class A common shares.

Directed Share Program

At our request, the underwriters have reserved for sale up to 5% of the Class A common shares being offered by this prospectus for sale at the initial public offering price to persons who are directors, officers or employees, or who are otherwise associated with us through a directed share program. The sales will be made by Citigroup Global Markets Inc., an underwriter of this offering. The number of Class A common shares available for sale to the general public will be reduced by the number of directed Class A common shares purchased by participants in the program. Any directed Class

A common shares not purchased will be offered by Citigroup Global Markets Inc. to the general public on the same basis as all other Class A common shares offered. Individuals who purchase Class A common shares in the directed share program will be subject to the 180-day lock-up restrictions described in the “Underwriting” section of this prospectus. We have agreed to indemnify the underwriters against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sales of the directed Class A common shares.

New York Stock Exchange symbol

“FPH”

The number of Class A common shares outstanding immediately after the completion of this offering and the other information based thereon in this prospectus, unless we indicate otherwise or the context otherwise requires, is based on 37,426,008 Class A common shares outstanding as of December 31, 2016, and excludes:

•

3,150,000 Class A common shares issuable upon the exercise in full of the underwriters’ over-allotment option;

•

2,331,026 Class A common shares issuable pursuant to outstanding RSUs as of December 31, 2016;

•

6,150,416 Class A common shares available for future issuance under our Incentive Award Plan (as defined below) (which includes 396,028 unvested restricted Class A common shares issued in January 2017); and

•

81,487,872 Class A common shares issuable in exchange for Class A units of the operating company (including the Class A units sold to Lennar in the concurrent private placement), in exchange for Class A units of the San Francisco Venture, and upon conversion of 81,463,433 Class B common shares into Class A common shares, each as described under “Description of Shares.”

The number of Class B common shares outstanding immediately after the completion of this offering and the concurrent private placement and the other information based thereon in this prospectus, unless we indicate otherwise or the context otherwise requires, is based on 74,320,576 Class B common shares outstanding as of December 31, 2016.

Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

•

assumes no exercise of the underwriters’ over-allotment option; and

•

reflects a 1 -for- 6.33 reverse split of our Class A common shares and our Class B common shares effected on March 31, 2017 (fractional shares resulting from such split were rounded to the nearest whole share).

Summary Historical and Pro Forma Condensed Consolidated Financial Information

The following table sets forth our summary historical consolidated financial information and our summary condensed consolidated pro forma financial information as of the dates and for the periods presented.

The summary historical financial information as of December 31, 2016 and 2015, and for each of the two years in the period ended December 31, 2016, has been derived from our audited consolidated financial statements included elsewhere in this prospectus.

Our summary unaudited pro forma condensed consolidated financial information is presented as if the formation transactions and the San Francisco Venture transactions had occurred on January 1, 2016, and gives effect to the adjustments described in “Unaudited Pro Forma Condensed Consolidated Financial Information.” Our summary condensed consolidated pro forma financial information is not indicative of our expected future results of operations following the formation transactions or the San Francisco Venture transactions. Our summary condensed consolidated pro forma financial information does not purport to represent our results of operations that would actually have occurred for the periods indicated.

As a result of the formation transactions, our future results of operations will not be comparable to our historical financial information, which did not include the results of operations of the San Francisco Venture, the management company or our investment in the Great Park Venture prior to May 2, 2016. You should read our summary historical consolidated financial information and our summary condensed consolidated pro forma financial information in conjunction with the information contained in “Selected Historical Consolidated Financial Information,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Structure and Formation of Our Company” and the consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.


	For the year ended December 31,
	Pro Forma			Historical
	2016			2016			2015
	(in thousands, except share and per share data)
Statement of Operations Data:
Revenues:
Land sales	$	9,561		$	9,561		$	17,229
Land sales – related party		2,761			2,512			6,065
Management services—related party		22,399			16,856			—
Operating properties		10,472			10,439			12,288

Total revenues		45,193			39,368			35,582

Costs and Expenses:
Land sales		356			356			(2,862	)
Management services		9,122			9,122			—
Operating properties		10,656			10,656			10,161
Selling, general and administrative		104,876			120,667			27,542
Management fees – related party		—			1,716			5,109

Total costs and expenses		125,010			142,517			39,950

Equity in earnings (loss) from unconsolidated entity		14,621			(1,356	)		—

Loss before income tax benefit		(65,196	)		(104,505	)		(4,368	)
Income tax benefit		8,901			7,888			546

Net loss		(56,295	)		(96,617	)		(3,822	)
Net loss attributable to noncontrolling interests		(43,352	)		(63,351	)		(1,137	)

Net loss attributable to the company	$	(12,943	)	$	(33,266	)	$	(2,685	)

Per Share Data:
Pro forma loss per share—basic and diluted
Net loss per Class A common share—basic and diluted	$	(0.35	)
Net loss per Class B common share—basic and diluted	$	(0.00	)
Pro forma weighted average common shares outstanding
Class A common shares—basic and diluted		38,456,375
Class B common shares—basic and diluted		74,320,575
Other Data:
Cash flows provided by (used in):
Operating activities				$	(124,637	)	$	(41,373	)
Investing activities					83,327			4,388
Financing activities					(5,043	)		(6,579	)
Balance Sheet Data (as of the end of the period):
Inventories				$	1,360,451		$	259,872
Cash and cash equivalents					62,304			108,657
Marketable securities held to maturity					20,577			25,000
Total assets					2,114,582			441,851
Total liabilities					606,469			93,418
Total noncontrolling interests					1,265,197			87,511
Total capital					1,508,113			348,433

An investment in our Class A common shares involves a high degree of risk. You should carefully consider the following material risks, as well as the other information contained in this prospectus, before making an investment in our company. If any of the following risks actually occur, our business, financial condition, results of operations or prospects could be materially and adversely affected. In such an event, the trading price of our Class A common shares could decline and you could lose part or all of your investment.

Our performance is subject to risks associated with the real estate industry.

Our economic performance is subject to various risks and fluctuations in value and demand, many of which are beyond our control. Certain factors that affect real estate generally and our properties specifically may adversely affect our revenue from land sales or leasing of retail or other commercial space. The following factors, among others, may adversely affect the real estate industry, including our properties, and could therefore adversely impact our financial condition and results of operations:

There are significant risks associated with our development and construction projects that may prevent completion on budget and on schedule.

At our projects, we are engaged in extensive construction activity to develop each community’s infrastructure, including grading and installing roads, sidewalks, gutters, utility improvements (such as storm drains, water, gas, sewer, power and communications), landscaping and shared amenities (such as community buildings, neighborhood parks, trails and open spaces) and other actions necessary to prepare each residential and commercial lot for construction. In addition, although we primarily rely on homebuilders to purchase homesites at our communities and construct homes, we may in the future construct a portion of the homes ourselves. For commercial or multi-family properties that we retain in the future, we may also construct the buildings ourselves.

Our development and construction activities entail risks that could adversely impact our financial condition and results of operations, including:

In addition, at The San Francisco Shipyard, certain parcels of land will not be conveyed to the San Francisco Venture until the U.S. Navy satisfactorily completes its finding of suitability to transfer process. In the event that the U.S. Navy takes longer than expected to complete its finding of suitability to transfer process, we may be forced to delay development of portions of The San Francisco Shipyard until such parcels are conveyed. In addition, allegations that a contractor hired by the U.S. Navy misrepresented the scope of its remediation work at The San Francisco Shipyard has resulted in governmental investigations, which could delay or impede the scheduled transfer of these parcels, which would in turn delay or impede our future development of such parcels. See “Business and Properties—Legal Proceedings.”

At Newhall Ranch, we are party to royalty-based lease agreements with oil and gas operators. Pursuant to the terms of these leases, the oil and gas operators are required to remediate certain environmental impacts caused by their operations following expiration of such leases. In the event that they take longer than expected to complete such remediation or default in their obligation, such that we are required to complete such remediation, we may be forced to delay development of Newhall Ranch until such remediation is complete or incur additional costs that are currently obligations of the oil and gas operators.

We cannot assure you that projects will be completed on schedule or that construction costs will not exceed budgeted amounts. Failure to complete development or construction activities on budget or on schedule may adversely affect our financial condition and results of operations.

Although there are agreements with the City of Irvine for Great Park Neighborhoods and the City and County of San Francisco for The San Francisco Shipyard and Candlestick Point that protect existing entitlements, our communities are subject to numerous local, state, and federal laws and other statutes, ordinances, rules and regulations concerning zoning, development, building design, construction and similar matters that impose restrictive zoning and density requirements in order to limit the number of homes or commercial square feet that can eventually be built within the boundaries of a particular area, as well as governmental taxes, fees and levies on the acquisition and development of land parcels. These regulations often provide broad discretion to the administering governmental authorities as to the conditions for our projects being approved, if approved at all. Further, if the terms and conditions of the development agreements with the Cities of Irvine and San Francisco are not complied with, existing entitlements under those agreements could be lost, including (in the case of San Francisco) the right to acquire certain portions of the land on which development activity is expected. New housing and commercial developments are often subject to determinations by the administering governmental authorities as to the adequacy of water and sewage facilities, roads and other local services, and may also be subject to various assessments for schools, parks, streets, affordable housing and other public improvements. As a result, the development of properties may be subject to periodic delays in certain areas due to the conditions imposed by the administering governmental authorities. Due to building moratoriums, zoning changes or “slow-growth” or “no-growth” initiatives that could be implemented in the future in the areas in which our properties are located, our communities may also be subject to periodic delays, or we could be precluded entirely from developing in certain communities or otherwise restricted in our business activities. Such moratoriums or zoning changes can occur prior or subsequent to commencement of our development operations, without notice or recourse. Local and state governments also have broad discretion regarding the imposition of development fees for projects in their jurisdictions. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety, and welfare issues, which can further delay these projects or prevent their development. As a result, revenue from land sales or leasing of retail or other commercial space may be adversely affected, or costs may increase, which could negatively affect our financial condition and results of operations.

In addition, laws and regulations governing the approval processes provide third parties the opportunity to challenge proposed plans and approvals. Certain of our plans and approvals have been challenged by third parties, such as environmental groups, and are currently the subject of ongoing legal proceedings. For more information, see “Business and Properties—Legal Proceedings.” These and any future third-party challenges to our planned developments provide additional uncertainties in real estate development planning and entitlements. Third-party challenges in the form of litigation could result in the denial of our right to develop in accordance with our current development plans, or could adversely affect the length of time or the cost required to obtain the necessary governmental approvals to develop. In addition, adverse decisions arising from any litigation could increase the cost and length of time to obtain ultimate approval of a project, and could adversely affect the design, scope, plans and profitability of a project, which could negatively affect our financial condition and results of operations.

Before any of our projects can generate revenues, we make material expenditures to obtain entitlements, permits and development approvals. It generally takes several years to complete this process and completion times vary based on complexity of the project and the community and regulatory issues involved. We could also be subject to delays in construction, which could lead to higher costs and adversely affect our results of operations. Changing market conditions during the entitlement and construction periods could negatively impact our revenue from land sales or leasing of retail or other commercial space. As a result of the time and complexity

involved in construction and obtaining approvals for our projects, we face the risk that demand for residential and commercial properties may decline and we may be forced to sell or lease properties at prices or rates that generate lower profit margins than we anticipated, or would result in losses. If values decline, we may be required to make material write-downs of the book value of our real estate assets or real estate investments.

On November 30, 2015, the Supreme Court of California issued a ruling under the California Environmental Quality Act (“CEQA”) and other state statutes, which requires the California Department of Fish and Wildlife (“CDFW”) to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the Environmental Impact Report (“EIR”) for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous related approvals. Although the Supreme Court’s ruling does not include any monetary damage awards, it has resulted in the need to reassess certain elements of the project’s potential impacts, and will result in the need to modify certain aspects (such as specific mitigation measures or project design features) related to the development plan for Newhall Ranch, and which could reduce the number of homesites or amount of commercial square feet we are able to develop, increase our costs or our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project, or adversely affect the length of time or the cost required to obtain CDFW’s approval of the corrected EIR. In addition, the ruling has resulted in delays in construction that have been taken into account in our anticipated delivery dates (see “Business and Properties—Newhall Ranch—Development Status”), but could result in further delays beyond those currently anticipated and reflected in our anticipated delivery dates, or changes in the sequencing of our communities. For more information, see “Business and Properties—Legal Proceedings.”

We will have to make significant investments at our properties before we realize significant revenues.

We currently plan to spend material amounts on horizontal development at our communities. Those expenditures primarily reflect the costs of developing the infrastructure at our properties, including grading and installing roads, sidewalks, gutters, utility improvements (such as storm drains, water, gas, sewer, power and communications), landscaping and shared amenities (such as community buildings, neighborhood parks, trails and open spaces) and other actions necessary to prepare each residential and commercial lot for construction. Taking into account the net proceeds of this offering, we currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan for several years. However, we may experience cost increases, our plans may change, new regulations and regulatory plan modifications or court rulings may affect our ability to develop or the cost to develop the project or circumstances may arise that result in our needing additional capital to execute our development plan. If we are not successful in obtaining additional financing to enable us to complete our projects, we may experience further delays or increased costs, and our financial condition and results of our operations may be adversely affected.

Our projects are subject to various environmental and health and safety laws and regulations. These laws and regulations require us to obtain and maintain permits and approvals, undergo environmental review processes and implement environmental and health and safety programs and procedures to mitigate the physical impact our communities will have on the environment (such as traffic impacts, health and safety impacts, impacts on public services and impacts on endangered, threatened or other protected plants and species) and to control risks associated with the siting, development, construction and operation of our projects, all of which involve a significant investment of time and expense. The particular environmental requirements that apply to a project vary depending on, among other things, location, environmental conditions, current and former uses of a property, the presence or absence of certain wildlife or habitats, and nearby conditions. We expect that increasingly stringent environmental requirements will be imposed on developers in the future. Such future requirements could include finalization of a currently proposed rule by the U.S. Fish and Wildlife Service

(“USFWS”) to list the San Fernando Valley spineflower as threatened under the federal Endangered Species Act (“Federal ESA”). The spineflower is located within our Newhall Ranch community. While permits and approvals have already been obtained from CDFW under the California Endangered Species Act for impacts to the spineflower resulting from our planned development activities in the Newhall Ranch community, if the USFWS makes a final determination to list the spineflower as threatened under the Federal ESA, it will require the U.S. Army Corps of Engineers (“Corps”) to consult with the USFWS under the Federal ESA to ensure that the Corp’s prior issuance of a permit for development of the Newhall Ranch community does not jeopardize the continued existence of the spineflower. If the USFWS makes a final determination to list the spineflower as threatened, it also must, within one year, designate critical habitat for the spineflower, which could include portions of the Newhall Ranch community. When critical habitat is designated, the Corps may need to consult with the USFWS to evaluate the effect of its permit issuance on designated critical habitat.

These future environmental requirements could affect the timing or cost of our development. In addition, future environmental requirements could reduce the number of homesites or amount of commercial square feet we are able to develop, increase our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project. Failure to comply with these laws, regulations and permit requirements may result in delays, administrative, civil and criminal penalties, denial or revocation of permits or other authorizations, other liabilities and costs, the issuance of injunctions to limit or cease operations and the imposition of additional requirements for future compliance as a result of past failures.

Certain of our environmental permits and approvals have been challenged by third parties, such as environmental groups, and are currently the subject of ongoing legal proceedings. On November 30, 2015, the Supreme Court of California issued a ruling addressing three issues related to the EIR portion of the Newhall Ranch Environmental Impact Statement/EIR, prepared by CDFW. A separate challenge to the Corps’ issuance of a permit for the Newhall Ranch community is currently pending in federal court before the Ninth Circuit Court of Appeals. For more information, see “Business and Properties—Legal Proceedings.” Future environmental permits and approvals that we will need to obtain for development areas within our communities may be similarly challenged.

We could incur significant costs related to regulation of and litigation over the presence of asbestos-containing materials at our properties.

Environmental laws govern the control, presence, maintenance and removal of asbestos-containing materials (“ACM”). Such laws may impose fines and penalties, and, on occasion, we have had such penalties imposed against us, for failure to comply with these requirements. Such laws require that owners or operators of buildings or properties containing ACM properly manage and maintain it, adequately notify or train those who may come into contact with it, and undertake special precautions including asbestos dust monitoring, removal or other abatement if asbestos would be disturbed during construction, renovation or demolition activities. Certain buildings on our properties that are being and will be demolished (or have already been demolished) in connection with our development plans, and the soil at certain of our properties, contain ACM which must be handled in accordance with these laws. Such laws may increase our development costs, and subject us to fines and penalties and other liabilities and costs in the event compliance is not maintained. We have also been exposed to legal proceedings initiated by third parties and may in the future be exposed to third party liability (such as liability for personal injury associated with exposure to asbestos).

As an owner and operator of real property, we could incur liability for environmental contamination issues.

We have incurred costs and expended funds, and may do so again in the future, to comply with environmental requirements, such as those relating to discharges or threatened discharges to air, water and land, the handling and disposal of solid and hazardous waste and the cleanup of properties affected by hazardous substances. Under these and other environmental requirements, as a property owner or operator, we may be

required to investigate and clean up hazardous or toxic substances or chemical releases at our communities or properties currently or formerly owned or operated by us, including as a result of the current and former oil and gas leasing operations at Newhall Ranch or as a result of prior activities conducted at the El Toro Base or The San Francisco Shipyard. Some of our properties have been or may be impacted by contamination arising from these or other prior uses of these properties, or adjacent properties. In this regard, certain portions of the El Toro Base and The San Francisco Shipyard have been or currently are listed on the USEPA’s National Priorities List as sites requiring cleanup under federal environmental law. Although the U.S. Navy has been primarily responsible for investigation and cleanup activities at these properties and will continue to have liability for future contamination that is discovered, we also may incur costs for investigation or cleanup of contamination that is discovered or disturbed during the course of our future development activities or otherwise. Similarly, in the event that oil and gas operators at Newhall Ranch do not fully remediate contamination resulting from such operations, we may incur such costs. As an owner and operator of real property, we could be held responsible to a governmental entity or third parties for property damage, personal injury and investigation and cleanup costs incurred by them in connection with any contamination at or from such real property. We may also be liable for the costs of remediating contamination at off-site disposal or treatment facilities when we arrange for disposal or treatment of hazardous substances or waste at such facilities, without regard to whether we comply with environmental laws in doing so.

Environmental laws and requirements typically impose cleanup responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. The liability under the laws related to such requirements has been interpreted to be joint and several, meaning a governmental entity or third party may seek recovery of the entire amount from us even if there are other responsible parties, unless the harm is divisible and there is a reasonable basis for allocation of the responsibility. The costs of investigation, remediation or removal of those substances, or fines, penalties and other sanctions and damages from third-party claims for property damage or personal injury, may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to sell, lease or otherwise use our property. While we currently have and may maintain insurance policies from time to time to mitigate some or all of these risks, insurance coverage for such claims may be limited or nonexistent. In addition, to the extent that we have indemnification rights against third parties relating to any such environmental liability or remediation costs (such as, for example, the U.S. Navy under certain federal laws as a former owner and operator of the El Toro Base and The San Francisco Shipyard, and former oil and gas lessees under certain settlement agreements relating to portions of Newhall Ranch), the indemnification may not fully cover such costs or we may not be able to collect the full amount of the indemnification from the third party. While investigation and cleanup activities have been substantially completed for the Great Park Neighborhoods, significant future work is contemplated over the next few years for certain of The San Francisco Shipyard parcels, and such work could delay or impede future transfer of such parcels for development.

Although most of our properties have been subjected to environmental assessments by independent environmental consultants or in the case of Great Park Neighborhoods and The San Francisco Shipyard, extensive environmental assessments by the U.S. government, these environmental assessments may not include or identify all potential environmental liabilities or risks associated with the properties. We cannot assure you that these or other environmental assessments identified all potential environmental liabilities, or that we will not incur material environmental liabilities in the future. We cannot predict with any certainty the magnitude of our future expenditures relating to environmental compliance or the long-range effect, if any, of environmental laws on our operations. Compliance with such laws could have a material adverse effect on our results of operations and competitive position in the future.

Our communities are all located in California, which makes us susceptible to risks in that state.

Our communities, as well as the Treasure Island and Concord communities, for which we provide development management services, are all located in California. We have no current plans to acquire any additional properties or operations outside of California and we expect, at least for a number of years, to be

dependent upon our existing projects for all of our cash flow. As a result, we are susceptible to greater risks than if we owned a larger or more geographically diverse portfolio. California also continues to suffer from severe budgetary constraints, which may result in the layoff or furlough of government employees, and is regarded as more litigious and more highly regulated and taxed than many other states. Any adverse change in the economic, political, competitive or regulatory climate in California, or the counties and cities where our properties are located, could adversely affect our real estate development activities and have a negative impact on our financial condition and results of operations.

In addition, historically, California has been subject to natural disasters, including earthquakes, droughts, floods, wildfires and severe weather, and coastal locations may be particularly susceptible to climate stress events or adverse localized effects of climate change, such as sea-level rise and increased storm frequency or intensity. We therefore have greater exposure to the risks of natural disasters, which can lead to power shortages, shortages of labor and materials and delays in development. The occurrence of natural disasters may also negatively impact the demand for new homes in affected areas. If our insurance does not fully cover losses resulting from these events, our financial condition and results of operations could be adversely affected.

Drought conditions in California may, from time to time, cause us to incur additional costs and delay or prevent construction within our communities, which could have a material adverse impact on our financial condition and results of operations.

In recent years, California has faced persistent drought conditions. In 2014, the Governor of California proclaimed a Drought State of Emergency warning that drought conditions may place drinking water supplies at risk in many California communities. In May 2016, the Governor issued an executive order that, among other things, directs the State Water Resources Control Board (the “SWRCB”) and the Department of Water Resources (the “DWR”) to require urban water suppliers to report monthly information regarding water use, conservation and enforcement on a permanent basis. In response to this executive order, the DWR and the SWRCB are required to engage in a public process and work with urban water suppliers, local governments and environmental groups to develop new water use efficiency targets as part of a long-term conservation framework for urban water agencies. These targets will go beyond the 20% reduction in per capita urban water use by 2020 that was previously adopted in 2009, and will be customized to fit the unique conditions of each water supplier. These and other measures that are instituted to respond to drought conditions could cause us to incur additional costs to develop each community’s infrastructure, as well as cause homebuilders and commercial builders to incur additional costs, which could reduce the price that they are willing to pay for our residential and commercial lots. In addition, as a consequence of the Governor’s order or if the drought were to continue, there could be restrictions or moratoriums on building permits and access to utilities, such as water and sewer taps, which could delay or prevent our construction activities, as well as the construction of homes and commercial buildings, even when we have obtained water rights for our communities.

Simultaneous development projects may divert management time and resources.

Since all of our communities, and the Treasure Island and Concord communities, in which Lennar is an investor and for which we provide development management services, are being developed simultaneously, members of our senior management will be involved in planning and developing these projects, which may divert management resources from the construction, sale, lease or opening of any of these projects. Management’s inability to devote sufficient time and attention to a project may delay the construction or opening of such project. This type of delay could adversely affect our financial condition and results of operations.

We are highly dependent on our relationships with homebuilders to purchase lots at our residential communities. Our business will be adversely affected if homebuilders do not view our residential communities as

desirable locations for homebuilding operations. Also, some homebuilders may be unwilling or unable to close on previously committed land parcel purchases due to factors outside of our control. As a result, we may sell fewer land parcels and may have lower revenues from sales, which could adversely affect our financial condition and results of operations.

We may from time to time be subject to litigation, which could have a material adverse effect on our financial condition and results of operations.

We may from time to time be subject to various claims and routine litigation arising in the ordinary course of business. Among other things, we are, and are likely to continue to be, affected by litigation against governmental agencies related to environmental and similar approvals that we receive or seek to obtain. For example, on November 30, 2015, the Supreme Court of California issued a ruling under CEQA and other state statutes, which requires CDFW to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the EIR for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous related approvals. The need to comply with the ruling has forced us to delay, and will increase the cost of, the Newhall Ranch community. For more information, see “Business and Properties—Legal Proceedings.” Some of these claims may result in potentially significant defense costs, settlements, fines or judgments against us, some of which may not be covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured or that exceed our insurance limits could have an adverse impact on our financial condition and results of operations. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage and adversely affect our results of operations, expose us to increased risks that would be uninsured or adversely impact our ability to attract officers and directors. Such litigation could adversely affect the length of time and the cost required to obtain the necessary governmental approvals. In addition, adverse decisions arising from any litigation could increase the cost and length of time to obtain ultimate approval of a project, could require us to abandon all or portions of a project and could adversely affect the design, scope, plans and profitability of a project, which could negatively affect our financial condition and results of operations.

We may be subject to increased costs of insurance or limitations on coverage.

We maintain comprehensive insurance coverage for general liability, property, workers’ compensation and other risks on all of our properties and operations, including insurance covering certain environmental risks and liabilities. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are some risks of loss for which we may be unable to purchase insurance coverage. For example, losses associated with certain environmental risks or liabilities, floods, landslides, earthquakes and other weather-related or geologic events may not be insurable and other losses, such as those arising from terrorism, may not be economically insurable. In addition, there is no assurance that certain types of risks that are currently insurable will continue to be insurable on an economically feasible basis, and we may discontinue certain insurance coverage on some or all of our properties in the future if the cost of premiums for any of these policies in our judgment exceeds the value of the coverage discounted for the loss. If an uninsured loss or a loss in excess of insured limits occurs, we may have to incur uninsured costs to mitigate such losses or lose all or a portion of the capital invested in a property, as well as the anticipated future revenue from the property. We might also remain obligated for any financial obligations related to the property, even if the property is irreparably damaged. Future changes in the insurance industry’s risk assessment approach and pricing structure could increase the cost of insuring our properties and operations or decrease the scope of insurance coverage, either of which could adversely affect our financial condition and results of operations.

Moreover, we carry several different lines of insurance, placed with several large insurance carriers. If any one of these large insurance carriers were to become insolvent, we would be forced to replace the existing insurance coverage with another suitable carrier and any outstanding claims would be at risk for collection. In such an event, we cannot be certain that we would be able to replace the coverage at similar or otherwise

favorable terms. Replacing insurance coverage at unfavorable rates and the potential of uncollectible claims due to carrier insolvency could adversely affect our financial condition and results of operations.

We cannot give any assurance that title to our properties will not be challenged or impugned, and cannot be certain that we have or will acquire valid title to our properties. Further, we cannot give any assurance that there are not any liens, encumbrances, mortgages, impositions, fines, violations, levies, superior title claims or other title defects or title issues (collectively, “title defects”) with respect to our properties. The lack of good, marketable fee title, or the existence of any existing title defects with respect to our properties, could materially and adversely affect our properties, including by resulting in: (1) chain of title issues (such as impediments to the potential sale, transfer, assignment or grant of any fee or leasehold interests in all or any portion of our properties); (2) financing issues (such as impediments to qualifying for a line of credit, mortgage or private equity financing); (3) development issues (such as impediments to qualifying for governmental licenses and permits or construction financing, delays in operations, or additional costs incurred in connection with any required corrective measures); (4) foreclosure, forfeiture and loss of fee title (such as resulting from a mortgage foreclosure, tax levy or rescission rights); (5) reduction of asset value; or (6) loss of revenue, capital or anticipated profits.

Although the San Francisco Venture holds title insurance on the portions of The San Francisco Shipyard and Candlestick Point that it currently owns, and the Great Park Venture holds title insurance on Great Park Neighborhoods, we do not hold title insurance on Newhall Ranch. In any event, an owner’s title insurance policy only provides insurance coverage as of the issuance date of such policy and does not protect against transfers or other title defects that impact the properties from and after the title policy issuance dates. Accordingly, for all of our properties, whether or not we hold title insurance, it is possible that there may be title defects for which we will have no title insurance coverage.

In addition, the title insurance policies we do hold may not insure for the current aggregate market value of our properties, and we do not intend to increase our title insurance coverage as the market value of our portfolio increases. As a result, we may not have sufficient coverage against all losses that we may experience, including from adverse title claims.

Inflation may adversely affect us by increasing costs that we may not be able to recover.

Inflation can adversely affect us by increasing costs of materials and labor. In addition, inflation is often accompanied by higher interest rates, which could have a negative impact on demand for homes and the cost of debt financing. In a highly inflationary environment, depending on industry and other economic conditions, we may be unable to raise prices enough to keep up with the rate of inflation, which would reduce our profit margins. Although the overall rate of inflation has been low for the last several years, we have been experiencing increases in the prices of labor and materials, especially at The San Francisco Shipyard and Candlestick Point, and there could be a significant increase in inflation in the future.

We compete with other residential, retail and commercial property developers in the development of properties in the Northern and Southern California markets. We compete with a number of residential, retail and commercial developers, some with greater financial resources, in seeking resources for development and prospective purchasers. Competition from other real estate developers may adversely affect our ability to attract purchasers and sell or lease residential, retail and commercial properties, attract and retain experienced real estate development personnel or obtain construction materials and labor. These competitive conditions could make it difficult to sell properties at desirable prices and could adversely affect our financial condition and results of operations.

We may be unable to obtain suitable bonding for the development of our communities.

We provide performance bonds and letters of credit in the ordinary course of business to governmental authorities and others to ensure the completion of our projects or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities. We may also be required to provide performance bonds or letters of credit to secure our performance under various escrow agreements, financial guarantees and other arrangements. If we are unable to obtain performance bonds or letters of credit when required or the cost or operational restrictions or conditions imposed by issuers to obtain them increases significantly, we may be significantly delayed in developing our communities or may incur significant additional expenses, and, as a result, our financial condition and results of operations could be materially and adversely affected.

Fluctuations in real estate values may require us to write down the carrying value of our real estate assets or real estate investments.

Our industry is subject to significant variability and fluctuations in real estate values. The valuation of our real estate assets or real estate investments is inherently subjective and based on the individual characteristics of each asset. Factors such as competitive market supply and demand of inventory, changes in laws and regulations, political and economic conditions and interest and inflation rate fluctuations subject our valuations to uncertainty. Our valuations are made on the basis of assumptions that may not prove to reflect economic or demographic reality. If the real estate market deteriorates, we may reevaluate the assumptions used in our analysis. As a result, adverse market conditions may require us to write down the book value of certain real estate assets or real estate investments and some of those write-downs could be material. Any material write-downs of assets could have a material adverse effect on our financial condition and results of operations.

Changes in global or regional climatic conditions and governmental actions in response to such changes may adversely affect us by restricting, or increasing the costs of, our planned development activities.

There is growing concern from many members of the scientific community and the general public that an increase in global average temperatures due to emissions of greenhouse gases and other human activities could cause significant changes in weather patterns and increase the frequency and severity of natural disasters. Government mandates, standards or regulations intended to reduce greenhouse gas emissions or ameliorate projected climate change impacts could result in restrictions on land development in certain areas, higher costs resulting from green building codes and increased energy, transportation and raw material costs, or cause us to incur compliance expenses that we will be unable to fully recover, which could reduce our gross profit margins and adversely affect our financial condition and results of operations.

Certain of our environmental permits and approvals for our planned development at Newhall Ranch have been challenged by environmental groups on the basis of how government agencies measure anticipated greenhouse gas emissions from our future development. On November 30, 2015, the Supreme Court of California issued a ruling under CEQA and other state statutes, which requires the CDFW to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the EIR for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous related approvals. Although the Supreme Court’s ruling does not include any monetary damage awards, it has resulted in the need to reassess certain elements of the project’s potential impacts, and will result in the need to modify certain aspects (such as specific mitigation measures or project design features) related to the development plan for Newhall Ranch, and which could reduce the number of homesites or amount of commercial square feet we are able to develop, increase our costs or our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project, or adversely affect the length of time or the cost required to obtain CDFW’s approval of the corrected EIR. In addition, the ruling has resulted in delays in construction that have been taken into account in our currently anticipated delivery dates (see “Business and Properties—Newhall Ranch—Development Status”), but could result in further delays beyond those currently anticipated and reflected in our anticipated delivery dates, or changes in the sequencing of our communities. For more information, see “Business and Properties—Legal Proceedings.”

Our property taxes could increase due to rate increases or reassessments, which may adversely impact our financial condition and results of operations.

We will be required to pay state and local real property taxes and assessments on our properties. The real property taxes and assessments on our properties may increase as property or special tax rates increase or if our properties are assessed or reassessed at a higher value by taxing authorities. If the property taxes and assessments we pay increase, our financial condition and results of operations could be adversely affected.

The estimates, forecasts and projections relating to our markets prepared by JBREC are based upon numerous assumptions and have not been independently verified by us.

This prospectus contains estimates, forecasts and projections relating to our markets that were prepared for us for use in connection with this offering by JBREC, an independent research provider and consulting firm focused on the housing industry. The estimates, forecasts and projections relate to, among other things, employment, demographics, household income, home sales prices and affordability. These estimates, forecasts and projections are based on data (including third-party data), significant assumptions, proprietary methodologies and the experience and judgment of JBREC, and we have not independently verified this information.

The forecasts and projections are forward-looking statements and involve risks and uncertainties that may cause actual results to be materially different from the projections. JBREC has made these forecasts and projections based on studying the historical and current performance of the residential housing market and applying JBREC’s qualitative knowledge about the residential housing market. The future is difficult to predict, particularly given that the economy and housing markets can be cyclical, subject to changing consumer and market psychology, and governmental policies related to mortgage regulations and interest rates. There will usually be differences between projected and actual outcomes, because events and circumstances frequently do not occur as expected, and the differences may be material. Accordingly, the forecasts and projections included in this prospectus might not occur or might occur to a different extent or at a different time. For the foregoing reasons, JBREC cannot provide any assurance that the estimates, forecasts and projections contained in this prospectus are accurate, actual outcomes may vary significantly from those contained or implied by the forecasts and projections and you should not place undue reliance on these estimates, forecasts and projections. Except as required by law, we are not obligated to, and will not, update the statements in this prospectus to conform to actual outcomes or changes in our or JBREC’s expectations.

Our trademarks, trade names and service marks may infringe other names and marks, or become diluted or invalidated.

We believe that our name and the names that we will be using to brand our communities, and their neighborhoods, are important to our business. However, we are aware of a number of other companies that use names that consist of or contain one or more of our names. As a result, there could be potential trade name, trademark or service mark infringement claims brought against us by the users of these names and marks, and such users may have rights that are senior to ours. If another company were to successfully challenge our right to use one or more of our names or marks, our business could be adversely impacted. In addition, to the extent third parties use similar names or marks, the value of our names and marks could be diminished.

Negative publicity could adversely affect our reputation as well as our business, financial results and share price.

Negative publicity related to our industry, company, brands, marketing, personnel, operations, business performance or customers may generate negative sentiment regarding our company, potentially affecting our share price and the performance of our business, regardless of its accuracy or inaccuracy. Our success in maintaining, extending and expanding our brand image and reputation depends on our ability to adapt and respond to such publicity in a rapidly changing environment. Negative sentiment resulting from adverse publicity or unfavorable public commentary could damage our brand image and reputation, reduce the demand for homes,

homesites, and commercial and multi-family properties in our communities, or adversely affect our ability to acquire additional landholdings and plan and develop new communities, any of which could adversely affect our business, financial condition, results of operations and share price.

Our success depends to a significant degree upon the contributions of certain key personnel, including Mr. Haddad, our Chairman and Chief Executive Officer. These key personnel would be difficult to replace because of their experience in identifying, acquiring, developing, financing and managing real estate assets and their long-term relationships across, and strong reputation in, the real estate industry generally and for our communities specifically. If any of our key personnel were to cease employment with us, our results of operations could suffer. Our ability to retain our key personnel or to attract suitable replacements should any members of our management team leave is dependent on the competitive nature of the employment market. The loss of services from key personnel or a limitation in their availability could materially and adversely impact our financial condition and results of operations. Further, such a loss could be negatively perceived in the capital markets.

As a holding company, we are entirely dependent upon the operations of the operating company and its ability to make distributions to provide cash flow to us or to pay taxes and other expenses.

We are a holding company and our only investment is our interest in the operating company. The operating company conducts all of our operations and owns all of our assets. As a result, our cash flow depends upon the cash flow of the operating company and its ability to provide funds to us in the form of distributions, loans or otherwise. The distributions that we receive from the operating company are based on our ownership interest in it, which was, as of December 31, 2016, 50.4% (and will be approximately 57.1% upon completion of this offering and the concurrent private placement of Class A units of the operating company to Lennar, or 58.3% if the underwriters exercise their over-allotment option in full). The operating company is treated as a partnership for U.S. federal income tax purposes and, as such, is not be subject to U.S. federal income tax. Instead, taxable income is allocated to the operating company’s members, including us. Accordingly, we incur income taxes on our proportionate share of any net taxable income of the operating company. Under the terms of the amended and restated operating agreement for the operating company, the operating company is obligated to make tax distributions to its members, including us, subject to the restrictions described below. These tax distributions generally will be made on a pro rata basis. See “The Limited Liability Company Agreement of the Operating Company—Distributions.” In addition to tax expenses, we also incur expenses related to our operations, including expenses under the tax receivable agreement, which we expect could be significant.

The ability of the operating company to make distributions in an amount sufficient to allow us to pay our taxes and operating expenses, including any payments under the tax receivable agreement, is subject to the obligations of the operating company and its subsidiaries to their respective creditors. In addition, future financing arrangements may contain negative covenants limiting the ability of the operating company to make distributions to us. Furthermore, the ability of the operating company’s subsidiaries and the Great Park Venture to pay distributions to the operating company may be limited by their obligations to their respective creditors and other investors. For example, the distribution rights of the holders of legacy interests in the Great Park Venture and the Class B partnership interests in FP LP will reduce the cash available for distribution to the operating company. Similarly, we may be limited in our ability to move capital among the operating company and its subsidiaries as a result of future financing arrangements and obligations to creditors.

As an equity investor in the operating company and, indirectly, in our other subsidiaries and the Great Park Venture, our right (and, therefore, the rights of our shareholders) to receive assets upon the liquidation or reorganization of the operating company and its subsidiaries, or the Great Park Venture, will be structurally subordinated to the claims of their creditors. Even if we are recognized as a creditor of the operating company, our claims may still be subordinated to any security interest in or other lien on its assets and any debt or other

obligations. Therefore, in the event of our bankruptcy, liquidation or reorganization, our consolidated assets will be available to satisfy the claims of our shareholders only after all of our liabilities and the liabilities of the operating company have been paid in full.

Some of our directors are involved in other businesses including real estate activities and public or private investments and, therefore, may have competing or conflicting interests with us.

Certain of our directors have and may in the future have interests in other real estate business activities, and may have control or influence over these activities or may serve as investment advisors, directors or officers of other real estate companies. These interests and activities, and any duties to third parties arising from such interests and activities, could divert the attention of such directors from our operations. Additionally, some of our directors are engaged in investment and other activities in which they may learn of real estate and other related opportunities. Our operating agreement and our code of business conduct and ethics expressly provide that our non-employee directors are not obligated to limit their interests or activities in their non-director capacities or to notify us of any opportunities that may arise in connection therewith, even if the opportunities are complementary to, or in competition with, our businesses. Accordingly, we have no expectation that we will be able to learn of or participate in such opportunities and it is possible that our directors, in their capacity as investment advisors, directors or officers of other real estate companies, may compete with us with respect to these opportunities. For example, three of our directors are senior officers of Lennar, one of our directors is a partner and portfolio manager of Castlelake, one of our directors is the lead independent director at William Lyon Homes (a regional homebuilder), one of our directors is a senior member of the investment team for Third Avenue Management LLC, and one of our directors is the chairman and chief executive officer of Shorenstein Properties, LLC (an owner and operator of office and multi-family properties), each of which may compete with us or make investments in entities that compete with us for development opportunities or otherwise.

Lennar is our largest equity owner, and will be engaging in transactions with us and may compete with us.

As of December 31, 2016, Lennar owned Class A common shares and Class B common shares representing approximately 45% of our outstanding voting interests. In addition, Lennar has agreed to purchase $100 million of additional Class A units of the operating company in the concurrent private placement. Three of our directors are also senior officers of Lennar. Lennar is one of the nation’s largest homebuilders and has in the past purchased properties from us. On October 6, 2015, the Great Park Venture completed the sale of Development Area 7 within Great Park Neighborhoods to a joint venture, in which Lennar owns a 50% interest, for $480 million (less an $8 million credit), of which $160 million was paid (or credited) at the closing and the remainder was paid on December 5, 2016. In the future, we expect that we will sell additional properties to Lennar. Transactions between Lennar and us must be approved by our conflicts committee. Transactions between the Great Park Venture and Lennar must be approved by a majority of the members of the Great Park Venture (excluding us). For a description of the primary responsibilities of our conflicts committee, see “Management—Board Committees—Conflicts Committee.” Nonetheless, Lennar’s relationship with us could give it an advantage in bidding for properties that we own.

Lennar and an affiliate of Castlelake own the Lennar-CL Venture, which on May 2, 2016 acquired from us the Phase 1 Land and is the beneficial owner of the parcel for the parking structure at Candlestick Point (with record title to such parcel to be conveyed once a final subdivision map for such parcel is recorded). The Lennar-CL Venture also assumed all of the debt of the San Francisco Venture then outstanding, subject to our obligation to reimburse the Lennar-CL Venture for $102.7 million related to EB-5 loan proceeds that benefitted us. We have agreements with the Lennar-CL Venture pursuant to which (1) the Lennar-CL Venture acquired or will acquire parcels within The San Francisco Shipyard and Candlestick Point that are entitled for up to 390 for-sale homesites and up to 334 multi-family homesites, (2) the Lennar-CL Venture agreed to construct a parking structure, the film and arts center building and portions of the retail areas at Candlestick Point and we agreed to fund certain related design and construction costs, (3) we agreed to manage the Lennar-CL Venture’s design and construction activities with respect to the parking structure, the film and arts center building and the multi-family

homes and (4) the Lennar-CL Venture agreed to transfer to us entitlements for the right to construct at least 172 homesites and at least 70,000 square feet of retail space for use in the development of other portions of The San Francisco Shipyard and Candlestick Point. Also, under the terms of the joint venture agreement between the San Francisco Venture and Macerich and the associated development agreement, if we or the Lennar-CL Venture fail to achieve certain milestones, including our conveyance to the joint venture of the land for the mall on or prior to December 31, 2017, subject to certain extensions, Macerich will have the right to terminate the joint venture, require us to repay a $65.1 million loan that Macerich made to us and require us to pay 50% of certain additional termination fees (the remainder would be paid by the Lennar-CL Venture). See “Certain Relationships and Related Party Transactions—San Francisco Venture Transactions.”

Lennar may also compete with us. Lennar owns 50% of a joint venture that owns the Treasure Island community, located in San Francisco, which may compete with The San Francisco Shipyard and Candlestick Point. Lennar also has a right to acquire the first phase of the Concord community, located in the San Francisco Bay Area, which may compete with The San Francisco Shipyard and Candlestick Point. We provide development management services to Lennar with respect to the Treasure Island and Concord communities. Lennar may in the future bid for, and acquire for itself, properties that we may seek to acquire. Our operating agreement contains provisions that will permit Lennar to engage in such activities and transactions.

Lennar and Castlelake and their affiliates control 65.6% of the voting power of our outstanding common shares (57.5% after this offering) and, as a result, are able to exercise significant influence over all matters requiring shareholder approval.

Holders of our Class A common shares and our Class B common shares vote together as a single class on all matters (including the election of directors) submitted to a vote of shareholders, with a share of each class entitling the holder to one vote. As of December 31, 2016, Lennar and Castlelake and their affiliates beneficially owned, in the aggregate, Class A common shares and Class B common shares representing 45.2% and 20.4%, respectively, of the voting power of our outstanding common shares (41.2% and 16.3%, respectively, following this offering if the underwriters do not exercise their over-allotment option, and 40.3% and 16.0%, respectively, if the underwriters exercise their over-allotment option in full). As a result, if these shareholders act together (which they have not agreed to do), they and their affiliates are able to exercise significant influence over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions, which may have the effect of delaying or preventing a third party from acquiring control of us. These transactions may include those that other shareholders deem to be in their best interests and in which those other shareholders might otherwise receive a premium for their shares over their current prices.

We may have assumed unknown liabilities in connection with the formation transactions, which, if significant, could adversely affect our financial condition and results of operations.

In the formation transactions, we acquired equity interests in entities which have existing liabilities, some of which may be unknown or unquantifiable. In a contribution and sale agreement that we entered into in connection with the formation transactions, we received representations and warranties regarding the entities in which we acquired interests, but these representations and warranties did not survive the closing. If we discover new or additional liabilities, we may have no recourse for such liabilities. Any such liabilities could adversely affect our financial condition and results of operations.

We did not receive appraisals or fairness opinions in connection with the formation transactions.

The value of the equity interests and other assets acquired by us in the formation transactions, and the value of the securities and other consideration provided in exchange for such equity interests and other assets, were determined based on negotiation among the parties. We did not obtain any third-party appraisals of these equity interests and other assets, and the valuation implied by the consideration received for some of the assets could exceed their fair market value.

We will be required to pay certain investors for certain expected tax benefits.

Commencing May 2, 2017, holders of Class A units of the operating company that are currently outstanding will be able to exchange their units for, at our option, either Class A common shares on a one-for-one basis (subject to adjustment in the event of share splits, distributions of shares, warrants or share rights, specified extraordinary distributions and similar events), or cash in an amount equal to the market value of such shares at the time of exchange. We expect that basis adjustments resulting from these transactions, if they occur, will reduce the amount of income tax we would otherwise be required to pay in the future.

Moreover, Section 704(c) of the Internal Revenue Code of 1986, as amended (the “Code”), and the U.S. Treasury regulations promulgated thereunder, require that items of income, gain, loss and deduction that are attributable to the operating company’s directly and indirectly held property, including property contributed to the operating company pursuant to the formation transactions, must be allocated among the members of the operating company to take into account the difference between the fair market value and the adjusted tax basis of such assets on the date the formation transactions are consummated. As a result, the operating company will be required to make certain special allocations of its items of income, gain, loss and deduction that are attributable to such assets. These allocations, like the increases in tax basis described above, are likely to reduce the amount of income tax we would otherwise be required to pay.

Simultaneously with the completion of the formation transactions, we entered into a tax receivable agreement with the holders of Class A units of the operating company and the holders of Class A units of the San Francisco Venture. These investors include Mr. Haddad and entities affiliated with Lennar and Castlelake. The tax receivable agreement provides for payments by us to such investors or their successors equal to 85% of the amount of cash savings, if any, in income tax we realize as a result of (1) increases in tax basis that are attributable to exchanges of Class A units of the operating company for our Class A common shares or cash or certain other taxable acquisitions of equity interests by the Company, (2) allocations that result from the application of the principles of Section 704(c) of the Code and (3) tax benefits related to imputed interest or guaranteed payments deemed to be paid or incurred by us as a result of the tax receivable agreement. The tax receivable agreement also makes certain assumptions intended to equalize the treatment of (A) holders who exchange their Class A units and provide us with tax benefits attributable to an increase in tax basis and (B) those who retain their Class A units and provide us with tax benefits attributable to special allocations of the operating company’s items of income and gain pursuant to Section 704(c) of the Code. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement.”

We expect that during the expected term of the tax receivable agreement, the payments that we make to the parties to the tax receivable agreement could be substantial. The actual amount and timing of any payments under the tax receivable agreement will vary depending upon a number of factors, including the timing of exchanges of Class A units of the operating company, the price of our Class A common shares at the time of such exchanges, the extent to which such exchanges are taxable and our ability to use the potential tax benefits, which will depend on the amount and timing of our taxable income.

Due to the various factors that will affect the amount and timing of the tax benefits we will receive, it is not possible to determine the exact amount of payments that will be made under the tax receivable agreement. If the tax receivable agreement were terminated immediately after this offering, we estimate that the termination payment would be approximately $209.1 million, assuming no material changes to the relevant tax law, that the aggregate value of our properties is equal to the value implied by such per share price and that LIBOR is 1.79%. However, this is merely an estimate, and the actual payments made under the tax receivable agreement in the event that it is terminated or otherwise could differ materially.

In certain circumstances, payments under the tax receivable agreement could exceed the actual tax benefits we realize.

The tax receivable agreement provides that, upon a merger, asset sale or other form of business combination or certain other changes of control or if, at any time, we materially breach any of our obligations under the tax receivable agreement or elect an early termination, our (or our successor’s) obligations with respect to exchanged or acquired units (whether exchanged or acquired before or after such change of control, early termination or breach) will be based on certain assumptions, including that (1) we will have sufficient taxable income to fully utilize the increased tax deductions and other benefits anticipated by the tax receivable agreement, (2) all of our properties will be disposed of ratably over a 15 year period for fair market value and (3) any Class A units of the operating company that have not been exchanged will be deemed exchanged for the market value of our Class A common shares at the time of such change of control, early termination or breach. Consequently, it is possible in these circumstances that the actual cash tax savings realized by us may be significantly less than the corresponding tax receivable agreement payments.

We will not be able to recover payments made under the tax receivable agreement if the related tax benefits are subsequently disallowed.

The Internal Revenue Service (the “IRS”) may challenge all or part of the tax basis increases or the special allocations upon which we calculate payments under the tax receivable agreement, and a court might sustain such a challenge. Although we are not aware of any issue that would cause the IRS to challenge potential tax basis increases or other tax benefits covered under the tax receivable agreement, if such basis increases or other benefits are subsequently disallowed (in whole or in part), the parties to the tax receivable agreement will not be required to return any payments made in respect of such disallowed basis or other tax benefit. Consequently, it is possible in these circumstances that the actual tax savings realized by us may be significantly less than the corresponding tax receivable agreement payments. However, because payments under the tax receivable agreement in a year are based upon the amount by which 85% of the Company’s cumulative net tax savings exceed the payments previously made under the tax receivable agreement, disallowance of basis increases or other tax benefits would reduce payments under the tax receivable agreement in years after the disallowance.

Our ability to utilize our net operating loss carryforwards and other tax attributes may be limited.

Our ability to fully utilize our existing net operating losses (“NOLs”) could be limited if we experience an “ownership change” within the meaning of Section 382 of the Code. For purposes of Section 382, an “ownership change” generally occurs if one or more shareholders or groups of shareholders who own at least 5% of our shares (with certain groups of less-than-5% shareholders treated as a single shareholder for this purpose) increase their ownership by more than 50 percentage points (by value) over their lowest ownership percentage within a rolling three-year period. We may experience an “ownership change” in connection with this offering or in the future as a result of changes in our equity ownership, which would result in a limitation on our ability to utilize our NOLs to offset future taxable income.

The sale of our Class A common shares in this offering will (and any future changes in our equity ownership may) count towards our cumulative change in our equity ownership for purposes of calculating whether we have experienced an “ownership change.” This could reduce our flexibility with respect to future equity financings that could impair our ability to utilize our NOLs.

As of December 31, 2016, we had tax effected U.S. federal and state NOLs of $96.6 million and $13.8 million, respectively, which will expire in various years beginning in 2030 if not utilized. Our NOLs only have value to the extent we generate taxable income. If we are unable to generate taxable income prior to the expiration of the NOLs, or if we are only marginally profitable during such period, we will be limited in our ability to utilize the tax benefits related to our NOLs.

The obligations associated with being a public company will require significant resources and management attention.

Following the completion of this offering, we will be a public company and expect to have our Class A common shares listed on the NYSE. As a result, we will need to comply with new laws, regulations and requirements, including the requirements of the Exchange Act, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), related regulations of the SEC and requirements of the NYSE, with which we were not required to comply as a private company. The Exchange Act requires, among other things, that we file annual, quarterly and current reports and proxy statements with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.

Section 404 of the Sarbanes-Oxley Act requires our management and independent registered public accounting firm to attest annually on the effectiveness of our internal control over financial reporting. However, because we are an “emerging growth company,” as defined in the JOBS Act, we will take advantage of certain exemptions from various reporting requirements, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Once we are no longer an emerging growth company or if, prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.

These reporting and other obligations will place significant demands on our management, administrative, operational and accounting resources and will cause us to incur significant expenses. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an internal audit function and hire additional legal, accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to operate successfully as a public company could have a material adverse effect on our financial condition and results of operations.

If we fail to implement and maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial results, which could materially and adversely affect us.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement. Historically, the San Francisco Venture and the management company maintained systems and procedures separate from ours, which may make it more difficult for us to evaluate and integrate their systems and procedures on a reliable company-wide basis. Prior to the formation transactions, we were not required to report the results of the San Francisco Venture and the management company on a consolidated basis with us. However, following the consummation of the formation transactions, we are required to report their operations on a consolidated basis with ours. We are in the process of implementing a company-wide internal audit function and modifying our systems and procedures in a number of areas to enable us to report on a consolidated basis.

We cannot be certain that we will be successful in implementing or maintaining adequate internal control over our financial reporting and financial processes. Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate, and management may not be able to remediate in a timely manner any such material weakness or significant deficiency. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our financial condition and results of operations.

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Class A common shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. An emerging growth company may take advantage of specified exemptions from various requirements that are otherwise applicable generally to public companies in the United States. These provisions include:

We have availed ourselves in this prospectus of the reduced reporting requirements described above with respect to selected financial data and executive compensation disclosure requirements. As a result, the information that we provide shareholders in our filings with the SEC may be different than what is available with respect to many other public companies. If some investors find our Class A common shares less attractive as a result of our reliance on these exemptions, there may be a less active trading market for our Class A common shares and our share price may be adversely affected. When we are no longer deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

Certain provisions in the operating company’s operating agreement may delay or prevent acquisitions of us.

Provisions in the operating company’s operating agreement may delay, or make more difficult, an acquisition or change of control of us. These provisions could discourage third parties from making proposals involving an acquisition or change of control of us, although some holders of our Class A common shares might consider such proposals, if made, desirable. These provisions include:

Anti-takeover provisions in our operating agreement or provisions of Delaware law could prevent or delay a change in control, even if a change of control would benefit our shareholders.

Provisions of our operating agreement, as well as provisions of Delaware law, could discourage, delay or prevent a merger, acquisition or other change in control, even if a change in control would benefit our shareholders. These provisions include the following:

In addition, our operating agreement provides that Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) will be deemed to apply to us as if we were a Delaware corporation. Section 203 of the DGCL may affect the ability of an “interested shareholder” to engage in certain business combinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that the shareholder becomes an “interested shareholder.” An “interested shareholder” is defined to include persons owning directly or indirectly 15% or more of the outstanding voting shares of a company.

Through a wholly owned subsidiary of the operating company, we own a 37.5% percentage interest in the Great Park Venture and serve as its administrative member. However, the administrative member’s authority is limited. Major decisions generally require approval by at least 75% of the votes held by the voting members of the Great Park Venture. We have two votes out of a total of five votes held by all voting members. Thus, any decision will require the additional approval of at least two of the other voting members. These approval rights could prevent actions at the Great Park Venture that would otherwise be in our best interests.

The joint venture with Macerich could be adversely affected by a failure of the Lennar-CL Venture to perform its obligations, by our reliance on Macerich’s ability to make its required contributions, by disputes between us and Macerich or between the Lennar-CL Venture and Macerich or by the failure to meet key development milestones.

The San Francisco Venture formed a joint venture with Macerich to develop, build and operate an urban retail outlet mall at The San Francisco Shipyard and Candlestick Point and entered into an associated development agreement with the joint venture to develop certain infrastructure and a parking structure to support the mall. The San Francisco Venture transferred its interest in this joint venture to the Lennar-CL Venture, but is entitled to re-acquire the interest upon completion of the mall and parking structure. Also, under the development agreement, the Lennar-CL Venture agreed to construct a parking structure, the film and arts center building and the apartments above portions of the retail areas at the mall. Macerich is the managing member of the mall joint venture and, as such, controls day-to-day decisions relating to the joint venture and the mall, subject to the right of the Lennar-CL Venture to approve certain major decisions, such as changes to the development plan and budget for the mall and entry into a business combination with another entity. Pending the transfer of the joint venture interest to us, we have certain approval rights as well. Macerich could fail to fund its share of required capital contributions to the joint venture, make poor business decisions or take actions that are contrary to our objectives. Any disputes that arise with Macerich may result in litigation or alternative dispute resolution that could increase our expenses or distract our officers from focusing on our business. Also, under the terms of the joint venture agreement and the associated development agreement with the joint venture, if we or the Lennar-CL Venture fail to achieve certain milestones, including our conveyance to the joint venture of the land for the mall on or prior to December 31, 2017, subject to certain extensions, Macerich will have the right to terminate the joint venture, require us to repay a $65.1 million loan that Macerich made to us (which otherwise will be converted to equity) and require us to pay 50% of certain additional termination fees (the remainder would be paid by the Lennar-CL Venture). To the extent that we or the Lennar-CL Venture fail to complete our respective construction obligations on a timely basis, we could be adversely affected, and Macerich or the Lennar-CL Venture may have rights against us.

We will need additional capital to execute our development plan, and we may be unable to raise additional capital on favorable terms.

Taking into account the net proceeds of this offering and the concurrent private placement, we currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan for several years. However, we will need additional capital to execute our development plan. There can be no assurance that we will be able to obtain new debt or equity financing on favorable terms, or at all, including as a result of volatility in the credit and capital markets, increases in interest rates or a decline in the value of our properties or portions thereof.

In addition, we currently expect to obtain a portion of our capital from forms of public financing, including CFDs, tax increment financing, and state and federal grants, which depend, in part, on factors outside of our control. CFDs are established when local government agencies impose a special property tax on real estate located within a specific district for the purpose of financing public improvements, including streets, water, sewage, drainage, electricity, schools, parks and fire and police protection. Our ability to obtain funds from CFDs is dependent on the value of developed property in the specific district, the collection of general property taxes from property owners in the specific district, collection of special taxes from property owners in the specific district and market interest rates at the time the CFD bonds are issued. For tax increment financing, the amount of property tax that a specific district generates is set at a base amount and as property values increase, property tax growth above that base amount, net of property taxes retained by the municipal agencies, can be used to fund redevelopment projects within the district. Our ability to obtain funds from tax increment financing is dependent on the value of developed property in the specific district, the collection of general property taxes from property owners in the specific district, the time it takes the tax assessor to update the tax rolls and market interest rates at the time the tax increment bonds are issued.

If we need to obtain additional financing, and such financing is not available in a timely manner or on terms substantially similar to our existing financing, it could increase our cost of capital and we may experience delays or increases in costs, and our financial condition and results of operations could be adversely affected.

We may use leverage in executing our development plan, which may adversely affect our financial condition.

We may decide to use leverage to execute our development plan. Our board of directors will consider a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the estimated market value of our assets and the ability of particular assets, and our company as a whole, to generate cash flow to cover the expected debt service. Although it is anticipated that future agreements governing our indebtedness will limit the amount of debt we may incur, our operating agreement does not contain such a limitation, and our board of directors may change our target debt levels at any time without the approval of our shareholders.

Incurring debt could subject us to many risks that, if realized, would adversely affect us, including the risk that:

In addition, if we do not have sufficient funds to repay our debt at maturity, it may be necessary to refinance the debt through additional debt or equity financings. If, at the time of any refinancing, prevailing interest rates or other factors result in a higher interest rate on such refinancing, increases in interest expense could adversely affect our cash flows and results of operations. If we are unable to refinance our debt on acceptable terms, we may be forced to dispose of our assets on disadvantageous terms, postpone investments in the development of our properties or default on our debt. In addition, to the extent we cannot meet any future debt service obligations, we will risk losing some or all of our assets that are pledged to secure such obligations.

Future debt financings, which would rank senior to our Class A common shares upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our Class A common shares for the purposes of liquidating or other distributions, may adversely affect the market price of our Class A common shares.

In the future, we may attempt to increase our capital resources by obtaining additional debt financing (including by offering debt securities) or making additional offerings of equity securities. Upon bankruptcy or liquidation, holders of our debt and our preferred shares and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our Class A common shares. Additional equity offerings may dilute the holdings of our existing shareholders or reduce the market price of our Class A common shares, or both. Any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Class A common shares and may result in dilution to the holders of our Class A common shares. Holders of our Class A common shares are not entitled to preemptive rights or other protections against dilution. Our preferred shares, if issued, could have a preference on liquidating or other distributions that could limit our ability to make distributions to the holders of our Class A common shares. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of our future offerings, and purchasers of our Class A common shares in this offering bear the risk of our future offerings reducing the market price of our Class A common shares and diluting their ownership interest in our company.

There is currently no public market for our Class A common shares, an active trading market for our Class A common shares may never develop following this offering and the price of our Class A common shares may be volatile and could decline substantially following this offering.

Prior to this offering there has been no public market for our Class A common shares. Although our Class A common shares have been approved for listing on the NYSE, an active trading market for our Class A common shares may never develop or, if one develops, it may not be sustained following this offering. The initial public offering price of our Class A common shares has been determined by agreement among us and the underwriters and may not accurately reflect the value of our Class A common shares. Accordingly, no assurance can be given as to the following:

If an active trading market develops, the trading price of our Class A common shares may fluctuate widely as a result of a number of factors, many of which are outside of our control. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many companies. These broad market fluctuations could negatively affect the market price of our Class A common shares. A significant decline in our share price could result in substantial losses for individual shareholders and could lead

to costly and disruptive securities litigation. If you purchase our Class A common shares in this offering, you will pay a price that was not established in a competitive market. Rather, you will pay a price that was negotiated with the representatives of the underwriters based upon a number of factors. The price of our Class A common shares that will prevail in the market after this offering may be higher or lower than the offering price.

Some of the factors that could negatively affect or result in fluctuations in the market price of our Class A common shares include:

Securities markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common shares. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have an adverse effect on our financial condition, results of operations, cash flow and per share trading price of our common shares. Any broad market fluctuations may adversely affect the trading price of our Class A common shares.

If you purchase our Class A common shares in this offering, you will experience immediate dilution.

The offering price of our Class A common shares is higher than the as adjusted net tangible book value per Class A common share outstanding upon the completion of this offering and the concurrent private placement. Accordingly, if you purchase Class A common shares in this offering, you will experience immediate dilution of approximately $1.49 in the as adjusted net tangible book value per Class A common share as of December 31, 2016, based upon the initial public offering price. This means that investors that purchase our Class A common shares in this offering will pay a price per share that exceeds the per share as adjusted net tangible book value of our assets.

We may issue additional Class A common shares in the future in lieu of incurring indebtedness, which may dilute existing shareholders, or we may issue securities that have rights and privileges that are more favorable than the rights and privileges accorded to holders of our Class A common shares.

We may issue additional securities, including Class A common shares, options, rights and warrants, for any purpose and for such consideration and on such terms and conditions as our board of directors may determine. Our board of directors will be able to determine the class, designations, preferences, rights, powers and duties of any additional securities, including any rights to share in our profits, losses and distributions, any rights to receive assets upon dissolution or liquidation and any redemption, conversion and exchange rights. Our board of directors may use such authority to issue additional securities exchangeable for our Class A common shares, such as the Class A units of the operating company, which would dilute existing holders of our Class A common shares, or to issue securities with rights and privileges that are more favorable than those of our Class A common shares. You will not have any right to consent to or otherwise approve the issuance of any such securities or the terms on which any such securities may be issued.

Substantial amounts of our Class A common shares could be sold in the near future, which could depress our share price and result in dilution of your shares.

Before this offering, there has been no public market for our Class A common shares. The sale or issuance of a substantial number of Class A common shares or other equity-related securities in the public markets, or the perception that such sales could occur, could depress the market price of our Class A common shares and impair our ability to raise capital through the sale of additional equity securities.

Upon completion of this offering, we will have outstanding 58,426,008 Class A common shares (61,576,008 Class A common shares if the underwriters exercise their over-allotment option in full). In addition, upon completion of this offering and the concurrent private placement, 81,487,872 Class A common shares will be reserved for issuance upon exchange of Class A units of the operating company (including 37,479,205 Class A units of the operating company issuable upon exchange of Class A units of the San Francisco Venture) and conversion of our Class B common shares, and 6,150,416 Class A common shares will be available for future issuance under the Incentive Award Plan (including 2,331,026 Class A common shares that may be issued in settlement of outstanding RSUs). See “Shares Eligible for Future Sale.”

The 21,000,000 Class A common shares sold in this offering (24,150,000 Class A common shares if the underwriters exercise their over-allotment option in full) will be freely transferable without restriction or further registration under the Securities Act, except for any shares purchased by our “affiliates,” as that term is defined by Rule 144 under the Securities Act. Subject to the terms of the lock-up agreements with the underwriters described under “Underwriting,” and the volume and manner of sale provisions of Rule 144 under the Securities Act, additional Class A common shares will be available for sale in the public market as follows:

The foregoing does not include up to 81,487,872 Class A common shares that we may issue upon conversion of Class B common shares or in exchange for outstanding Class A units of the operating company (including Class A units of the operating company issued in exchange for Class A units of the San Francisco Venture). Beginning May 2, 2017, all holders of currently outstanding Class A units of the operating company may exchange their units for, at our option, either Class A common shares on a one-for-one basis (subject to adjustment for share splits and similar events) or cash in an amount equal to the market value of such shares at the time of exchange. In addition, after a 12-month holding period, Lennar will also have the ability to exchange the Class A units it acquires in the concurrent private placement. Holders of Class A units of the San Francisco Venture may exchange their units for Class A units of the operating company on a one-for-one basis (with no holding period), subject to certain exceptions.

Beginning six months after the completion of this offering, certain holders of our Class A common shares, Class A units of the operating company or Class A units of the San Francisco Venture will have the right, subject to some conditions, to require us to file a registration statement covering their sale of Class A common shares (including Class A common shares issued in exchange for Class A units of the operating company or Class A units of the San Francisco Venture) or to require that we register and sell, on our own behalf, Class A common shares, the proceeds of which will be used to purchase from such holders their Class A units of the operating company or Class A units of the San Francisco Venture.

Following this offering, certain holders of our Class A common shares, Class A units of the operating company or Class A units of the San Francisco Venture will have the right, subject to certain conditions, to require us to file registration statements covering their Class A common shares or to require that we register and sell, on our own behalf, Class A common shares the proceeds of which will be used to purchase from such holders Class A units of the operating company or Class A units of the San Francisco Venture. We also will register Class A common shares that we have issued and may issue under our employee equity incentive plans. Once we register these shares, they will be able to be sold freely in the public market upon issuance, subject to existing lock-up agreements.

We and our executive officers, directors and certain of our existing shareholders (representing, in the aggregate, approximately 90% of our outstanding Class A common shares, on a fully diluted basis, immediately prior to this offering) have entered into lock-up agreements with the underwriters of this offering in which we and they have agreed, among other things, not to sell or agree to sell any Class A common shares, or any securities convertible into, or exercisable or exchangeable for, Class A common shares, until 180 days after the date of this prospectus. However, Citigroup Global Markets Inc. and J.P. Morgan Securities, LLC may, with our prior written consent, permit our executive officers, directors and certain current owners of Class A common shares to sell shares prior to the expiration of the restricted period. See “Underwriting” for a more complete description of the lock-up agreements that we and our executive officers, directors and certain current owners of Class A common shares have entered into with the underwriters.

We cannot predict whether future issuances or sales of our Class A common shares or the availability of shares for resale in the open market will decrease the per share trading price of our Class A common shares. The per share trading price of our Class A common shares may decline significantly when the restrictions on resale by certain of our shareholders lapse or upon the registration of additional Class A common shares pursuant to registration rights granted in connection with this offering.

We do not intend to pay distributions on our Class A common shares for the foreseeable future.

We have no current plans to pay distributions on our Class A common shares in the foreseeable future. We intend to retain our earnings, if any, to use in our ongoing operations. Any decision to declare and pay distributions in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our financial condition, results of operations, cash requirements, contractual restrictions and other

factors that our board of directors may deem relevant. In addition, because we are a holding company and our only investment is our interest in the operating company, we will only be able to pay distributions from funds we receive from the operating company. Our board of directors has the authority to issue one or more series of preferred shares without action of our shareholders. The issuance of preferred shares could have the effect of limiting distributions on our Class A common shares. Accordingly, you may need to sell your Class A common shares to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.

If security or industry analysts do not publish, or cease publishing, research reports about us, our business or our market, or if such analysts make adverse recommendations regarding our Class A common shares, our share price and trading volume could decline.

If an active trading market for our common shares develops, the trading market will be influenced by whether industry or securities analysts publish research and reports about us, our business, our market or our competitors and, if any analysts do publish such reports, what they publish in those reports. We may not obtain analyst coverage in the future. Any analysts who do cover us may make adverse recommendations regarding our shares, adversely change their recommendations from time to time, or provide more favorable relative recommendations about our competitors. If any analyst who may cover us in the future were to cease coverage of our company or fail to regularly publish reports on us, or if analysts fail to cover us or publish reports about us at all, we could lose, or never gain, visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

This prospectus contains forward-looking statements that are subject to risks and uncertainties. We caution investors that any forward-looking statements presented in this prospectus are based on our current views and information currently available to us. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. Furthermore, all of the statements regarding future financial performance, including market conditions and demographics and discussions of strategy, plans and intentions, are forward-looking statements.

Forward-looking statements are subject to risks, uncertainties and assumptions, and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. We believe these risks and uncertainties include, but are not limited to, the following:

Please see “Risk Factors” for a more detailed discussion of these and other risks.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this prospectus. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law.

We estimate that we will receive gross proceeds from this offering of $294.0 million, or $338.1 million if the underwriters exercise their over-allotment option in full. After deducting the underwriting discounts and commissions and estimated offering expenses payable by us, we expect to receive net proceeds from this offering of approximately $269.4 million, or approximately $310.7 million if the underwriters exercise their over-allotment option in full.

Net proceeds to the operating company from the concurrent private placement will be $100 million.

We have no plans to pay distributions on our Class A common shares in the foreseeable future. Any decision to declare and pay distributions in the future will be made at the sole discretion of our board of directors and will depend on, among other things, our financial condition, results of operations, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. Because we are a holding company and our only investment is our interest in the operating company, we will only be able to pay distributions from funds we receive from the operating company. In addition, the operating company’s ability to pay distributions to us will depend on the ability of its subsidiaries and the Great Park Venture to pay dividends or distributions to the operating company. The priority distribution rights of the holders of legacy interests in the Great Park Venture and the Class B partnership interests in FP LP will limit the cash available for distribution to the operating company until such rights are satisfied in full. See “Structure and Formation of Our Company.”

Holders of our Class B common shares are entitled to receive distributions of the same type and at the same time as any distributions payable on our outstanding Class A common shares in an amount per Class B common share equal to the amount of distributions paid on 0.0003 Class A common shares. See “Description of Shares—Class B Common Shares.”

We expect to cause the operating company to make distributions to us in an amount sufficient to cover distributions, if any, declared by us. If the operating company makes such distributions, each holder of Class A units of the operating company will be entitled to receive equivalent distributions from the operating company on its Class A units, and we expect to cause the San Francisco Venture to make distributions on its Class A units in an amount per unit equal to the distributions per Class A unit made by the operating company.

We did not declare or pay any distributions in 2015, 2016 or between January 1, 2017 and the date of this prospectus.

The following table sets forth our cash and capitalization as of December 31, 2016:

You should read this table in conjunction with “Prospectus Summary—Summary Historical and Pro Forma Condensed Consolidated Financial Information,” “Use of Proceeds,” “Selected Historical Consolidated Financial Information,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Structure and Formation of Our Company” and the condensed consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.

If you invest in our Class A common shares, you will experience immediate dilution to the extent of the difference between the initial public offering price per Class A common share and the as adjusted net tangible book value per Class A common share after this offering.

Our net tangible book value as of December 31, 2016 was approximately $1,380.5 million, or $12.35 per Class A common share. Net tangible book value represents the amount of total tangible assets less total liabilities. Net tangible book value per share represents as adjusted net tangible book value divided by the number of Class A common shares outstanding, on a fully diluted basis.

After giving effect to (i) the sale of 21,000,000 Class A common shares in this offering at the initial public offering price of $14.00 per share and after deducting underwriting discounts and commissions, and estimated offering expenses, (ii) the sale in a private placement to Lennar of (a) 7,142,857 Class A units of the operating company at a price of $14.00 per unit, and (b) 7,142,857 Class B common shares at a price of $0.00633 per share, and (iii) the use of proceeds from this offering and such private placement, our adjusted net tangible book value as of December 31, 2016 would have been $1,750.0 million, or $12.51 per Class A common share. This represents an immediate increase in adjusted net tangible book value of $0.16 per share to our existing shareholders, and an immediate dilution in adjusted net tangible book value of $1.49 per share to new investors purchasing our Class A common shares in this offering. Dilution to new investors is determined by subtracting adjusted net tangible book value after this offering, and such private placement, from the initial public offering price paid by new investors purchasing our Class A common shares in this offering.

The following table illustrates this dilution on a per share basis assuming the underwriters do not exercise their over-allotment option:

If the underwriters exercise their over-allotment option in full, the adjusted net tangible book value will be $12.52 per share, and the immediate dilution experienced by investors purchasing our Class A common shares in this offering will be $1.48 per share. In addition, in calculating per share amounts above, the number of Class A common shares outstanding excludes 6,150,416 Class A common shares available for future issuance under the Incentive Award Plan.

The following table summarizes, as of December 31, 2016, the number of Class A common shares acquired from us, the total consideration paid and the average price per share paid to us (1) by existing shareholders, (2) by new investors purchasing Class A common shares in this offering, and (3) by Lennar in the concurrent private placement. The information in the table is calculated (i) before deducting underwriting discounts and commissions and estimated offering expenses, (ii) after giving effect to (a) the sale of 21,000,000 Class A common shares in this offering at a price per share equal to the initial public offering price of $14.00 per share, and (b) the sale in a concurrent private placement to Lennar of (x) 7,142,857 Class A units of the operating company at a price of $14.00 per unit, and (y) 7,142,857 Class B common shares at a price of $0.00633 per

share, and (iii) assuming that all Class A units of the operating company, and all Class A units of the San Francisco Venture, are exchanged for our Class A common shares, and all Class B common shares are converted into our Class A common shares. Total consideration for shares issued pursuant to our plan of reorganization in 2009 (and shares issuable in exchange for units issued pursuant to such plan) is based on the equity value of our company, as determined at the time of our confirmed plan of reorganization. Total consideration for other shares issued for non-cash consideration (including shares issuable in exchange for units issued in the formation transactions) is based on estimated fair value, as determined in accordance with the applicable Financial Accounting Standards Board Accounting Standards Codification Topics.

The table above assumes no exercise of the underwriters’ over-allotment option. If the underwriters exercise their over-allotment option in full, the number of Class A common shares purchased by investors in this offering would increase to 24,150,000, and our existing shareholders would own 78.1%, investors in this offering would own 16.9% and the investor in the concurrent private placement would own 5.0% of the total number of our Class A common shares outstanding upon the closing of this offering.

The following tables set forth our selected historical consolidated financial information as of the dates and for the periods presented. The selected consolidated financial information as of December 31, 2016 and 2015, and for each of the two years in the period ended December 31, 2016, has been derived from our audited consolidated financial statements included elsewhere in this prospectus.

As a result of the formation transactions, our future results of operations will not be comparable to our historical financial information, which did not include the results of operations of the San Francisco Venture, the management company or our investment in the Great Park Venture prior to May 2, 2016. You should read the following selected historical consolidated financial information in conjunction with the information contained in “Summary Historical and Pro Forma Condensed Consolidated Financial Information,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Structure and Formation of Our Company” and the consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.

The following unaudited pro forma condensed consolidated financial information has been derived by applying pro forma adjustments to our historical financial statements included elsewhere in this prospectus. Our unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2016 gives pro forma effect to the formation transactions and the San Francisco Venture transactions, as described in the following paragraphs and accompanying notes. We have not presented an unaudited pro forma condensed consolidated balance sheet as of December 31, 2016 because the formation transactions and the San Francisco Venture transactions were consummated on May 2, 2016 and are reflected in our historical balance sheet as of December 31, 2016 included elsewhere in this prospectus. See “Capitalization” for more information regarding the impact of this offering and the concurrent private placement on our historical balance sheet as of December 31, 2016.

Our unaudited pro forma condensed consolidated statement of operations is presented for informational purposes only and should be read in conjunction with the historical financial statements and related notes thereto included elsewhere in this prospectus. The adjustments reflected in our unaudited pro forma condensed consolidated statement of operations are based on available information and assumptions that we consider reasonable. Our unaudited pro forma condensed consolidated statement of operations does not purport to represent our results of operations that would actually have occurred if the formation transactions and the San Francisco Venture transactions had been consummated on January 1, 2016, nor do they project our results of operations for any future date or period.

Our unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2016 gives effect to the following:

Our unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2016 does not give pro forma effect to this offering or the application of the net proceeds therefrom. In addition, following this offering, we will incur costs associated with being a U.S. publicly traded company. Such costs will include new or increased expenses for such items as insurance, directors’ fees, accounting and legal services and compliance with applicable U.S. regulatory and stock exchange requirements, including costs associated with compliance with the Sarbanes-Oxley Act and periodic or current reporting obligations under the Exchange Act. No pro forma adjustments have been made to reflect such costs.

The unaudited pro forma condensed consolidated statement of operations of Five Point Holdings, LLC (“Five Point” and, together with its subsidiaries, the “Company”) for the year ended December 31, 2016 is derived from the financial statements of: (1) the Company; (2) the San Francisco Venture and its subsidiaries; (3) the management company; and (4) the Great Park Venture, which are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2016 is presented as if the formation transactions and the San Francisco Venture transactions had occurred on January 1, 2016.

As a result of the formation transactions, which were completed on May 2, 2016, all of our assets are held by, and our operations are conducted through, the operating company. Five Point is the sole operating managing member of the operating company and, as of December 31, 2016, owned 50.4% of the outstanding Class A units and 100% of the outstanding Class B units of the operating company. We have identified the operating company as a variable interest entity (“VIE”), with Five Point as the primary beneficiary; as a result, Five Point consolidates the financial results of the operating company and its consolidated subsidiaries.

In addition, as a result of the formation transactions, we have identified the San Francisco Venture as a VIE, with the operating company as the primary beneficiary. As a result, the operating company consolidates the financial results of the San Francisco Venture and its consolidated subsidiaries. For more information regarding the management of the San Francisco Venture, see “The Operating Agreement of the San Francisco Venture.” The operating company also consolidates the financial results of the management company after acquiring a controlling interest of the management company in connection with the formation transactions.

Our ownership percentage and the control provisions of the Great Park Venture’s operating agreement do not allow us to control the Great Park Venture and its subsidiaries. Therefore, the operating company does not consolidate the assets, liabilities or results of operations of the Great Park Venture.

We refer to the San Francisco Venture, the management company and the Great Park Venture as the “acquired entities.” Our acquisition of equity interests in the San Francisco Venture and the management company has been accounted for under the purchase method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, with Five Point treated as the accounting acquirer. Our investment in the Great Park Venture is accounted for under the equity method of accounting in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures. The accompanying unaudited pro forma condensed consolidated statement of operations reflect our preliminary estimate of purchase accounting fair value adjustments and purchase price allocations. These preliminary estimates are subject to change. Differences between these preliminary estimates and the final acquisition accounting may occur, and any differences could have a material impact on the accompanying unaudited pro forma condensed consolidated statement of operations and our future results of operations.

Our unaudited pro forma condensed consolidated statement of operations is presented for informational purposes only and should be read in conjunction with the historical financial statements and related notes thereto included elsewhere in this prospectus. The historical financial information has been adjusted to give effect to matters that are (1) directly attributable to the formation transactions and the San Francisco Venture transactions, (2) factually supportable and (3) expected to have a continuing impact on the operating results of the combined company. The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed, and have been prepared to illustrate the estimated effect of the

formation transactions and the San Francisco Venture transactions. The final determination of the purchase price allocation will be based on the fair values of assets acquired and liabilities assumed as of May 2, 2016, and could result in a material change to the unaudited pro forma condensed consolidated financial information.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may vary materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Risk Factors” and the matters set forth in this prospectus. See “Cautionary Statement Regarding Forward-Looking Statements.” You should read this discussion in conjunction with the other financial information included elsewhere in this prospectus, including “Prospectus Summary—Summary Historical and Pro Forma Condensed Consolidated Financial Information,” “Selected Historical Consolidated Financial Data,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Business and Properties” and the consolidated financial statements and related notes thereto. As used in this section, “we,” “us” and “our” refer to Five Point Holdings, LLC and its consolidated subsidiaries after giving effect to the formation transactions, and “Five Point” refers to Five Point Holdings, LLC (without its consolidated subsidiaries) after giving effect to the formation transactions.

We are the sole operating managing member and owned, as of December 31, 2016, approximately 50.4% of the operating company. We conduct all of our businesses in or through the operating company, which directly or indirectly owns equity interests in: (1) FPL, which owns Newhall Land & Farming, the entity that is developing Newhall Ranch; (2) the San Francisco Venture, which is developing The San Francisco Shipyard and Candlestick Point; (3) the Great Park Venture, which is developing Great Park Neighborhoods; and (4) the management company. The operating company controls the management of all of these entities except for the Great Park Venture. The operating company owns a 37.5% percentage interest in the Great Park Venture, and the management company performs development management services for the Great Park Venture.

On May 2, 2016, we completed the formation transactions, in which we acquired controlling interests in the San Francisco Venture and the management company, and a 37.5% percentage interest in the Great Park Venture. The formation transactions transformed us into an owner, manager and developer of communities at three locations in coastal California.

We have identified Five Point Holdings, LLC as our predecessor for accounting purposes. Prior to the formation transactions, Five Point Holdings, LLC had a controlling interest in the operating company, which owns FPL. Our acquired businesses were not under common control prior to the formation transactions, despite having commonality of several owners. In determining Five Point Holdings, LLC as our predecessor, we considered many factors, including, but not limited to, Five Point Holdings, LLC being considered the accounting acquirer in the formation transactions, the extent of historical operations at the companies, the relative size of each business acquired and our organizational and governance structure subsequent to the formation transactions.

We are the largest owner and developer of mixed-use, master-planned communities in coastal California, based on the total number of residential homesites permitted to be built under existing entitled zoning. We are primarily engaged in the business of planning and developing our three mixed-use, master-planned communities, and our principal source of revenue is the sale of residential and commercial land sites to homebuilders, commercial developers and commercial buyers. We may also retain a portion of the commercial and multi-family properties in our communities as income-producing assets.

We are the initial developer of our three communities that are designed to include approximately 40,000 residential homes and approximately 21 million square feet of commercial space over a period of more than

10 years. Our three mixed-use, master-planned communities are: (1) Newhall Ranch in Los Angeles County; (2) The San Francisco Shipyard and Candlestick Point in the City of San Francisco; and (3) Great Park Neighborhoods in Orange County.

We stage the development process to optimize the pace of land sales and land values within our communities. As a result, we are often in multiple phases of the development lifecycle within each of our communities. The development lifecycle of our mixed-use, master-planned communities can be broken down into several phases. First, we obtain title, or the contractual right to acquire title, to the undeveloped land. Second, we obtain the necessary primary entitlements from governmental agencies for the community, which typically include zoning and general plan approvals and certification of an environmental impact report under CEQA, as well as any state or federal permits required for development. Third, we continue to refine the master plan for the community beyond the primary entitlements by planning and subdividing the land into separate legal lots for residential and commercial development and obtaining any other requisite discretionary approvals needed to commence construction. Fourth, we make significant investments in the community’s infrastructure and common improvements, including grading and installing roads, sidewalks, gutters, utility improvements (such as storm drains, water, gas, sewer, power and communications), landscaping and shared amenities (such as community buildings, neighborhood parks, trails and open spaces), and prepare each lot for sale or development by us. Fifth, residential and commercial lots within the community are typically sold to homebuilders, commercial developers or commercial buyers, although in some cases we may retain lots and build homes or commercial buildings ourselves. Sixth, homebuilders construct the homes and commercial developers, commercial buyers or we construct the commercial buildings. Finally, homebuilders or commercial builders sell the homes or commercial buildings to homebuyers or commercial buyers, although in some cases we may retain certain income-producing properties. Given the large scale of our communities, some of these phases may occur concurrently across different parts of a single community. Further, depending on the specific plans for each community and market conditions, these phases may occur in a different sequence than as described above.

Within the development lifecycle, our cash expenditures are concentrated in the title acquisition, entitlement and infrastructure development phases, and our revenue generation occurs in the land sale phase. If we also build all or a portion of the homes or commercial buildings within a community, we incur additional development costs and recognize revenue when homes or commercial properties are sold. In addition, with respect to properties that we may retain in the future, we expect to recognize revenue in connection with lease or other related payments from tenants.

Our principal source of revenue generation is from selling homesites to homebuilders and commercial lots to commercial developers or commercial buyers. We primarily sell homesites to national, regional and local homebuilders in a competitive process, although in some cases we may negotiate with a single homebuilder directly. Our residential land sales typically require a cash payment upfront and include participation provisions that allow us to share in the profits realized by the homebuilders if the overall profitability of a block of homes exceeds an agreed-upon margin. We may sell commercial lots to commercial developers through a competitive process or we may negotiate directly with a commercial buyer. We also regularly assess our development plan and may retain a portion of the commercial or multi-family properties in our communities as income-producing assets.

In the ordinary course of our business, we have sold homesites to Lennar, which is our largest equity owner. For the years ended December 31, 2016 and 2015, we recognized $2.5 million and $6.1 million, respectively, of revenue from land sales pursuant to purchase and sale agreements with Lennar. Additionally, since the formation transactions on May 2, 2016, we have been providing certain management services for ventures in which Lennar is a significant participant. For the year ended December 31, 2016, we recognized $3.5 million of revenue from management services pursuant to management agreements with Lennar ventures. For additional information about transactions with Lennar, see “Certain Relationships and Related Party Transactions—Other Transactions with Lennar.” We also provide management services to the Great Park Venture pursuant to a development management agreement. For the year ended December 31, 2016, we recognized $13.3 million of revenue from

management services provided to the Great Park Venture. Other than Lennar and the Great Park Venture, no customer accounted for more than 10% of our revenue during the years ended December 31, 2016 and 2015.

Our results of operations are subject to various risks and fluctuations in value and demand, many of which are beyond our control. Our business could be impacted by, among other things, downturns in economic conditions at the national, regional or local levels, particularly where our communities are located, inflation and increases in interest rates, significant job losses and unemployment levels, and declines in consumer confidence and spending.

We generate most of our revenue from land sales, which are dependent on demand from homebuilders, commercial developers and commercial buyers, which is in turn dependent on the prices that homebuyers, commercial buyers and renters are expected to pay. In addition, sales of homesites typically include participation provisions that allow us to share in the profits realized by the homebuilders if the overall profitability of a block of homes exceeds an agreed-upon margin. Because our revenue is influenced by the prices that homebuyers and commercial buyers are willing to pay for homes or commercial buildings in our region, our results of operations may be influenced by, among other things, the overall supply and demand for housing and commercial properties, the prevailing interest rates for mortgages, and the availability of mortgage financing for residential and commercial developers and residential and commercial buyers.

As a developer of real property in California, we are subject to numerous land use and environmental laws and regulations. Before we can begin developing our communities, we must obtain entitlements, permits and approvals. Depending upon the type of the approval being sought, we may also need to complete an environmental impact report, remediate environmental impacts or agree to finance or develop public infrastructure within the community, each of which would impose additional costs on us. In the event that we materially modify any of our existing entitlements, approvals or permits, we may also need to go through a discretionary approval process before the relevant governmental authority, or go through an additional or supplemental environmental review and certification process. See “Business and Properties—Legal Proceedings” for more information about litigation, including a decision of the California Supreme Court, that has delayed development, and increased development costs, at Newhall Ranch.

In addition, laws and regulations governing the approval processes provide third parties with the opportunity to challenge our entitlements, permits and approvals. The prospect of these third-party challenges creates additional uncertainty. Third-party challenges in the form of litigation can adversely affect the length of time or the cost required to obtain the necessary governmental approvals to develop, or result in the denial of our right to develop the particular community or development area in accordance with our current development plans. Furthermore, adverse decisions arising from any litigation can increase the cost or length of time to obtain ultimate approval of a project, if such approval is obtained at all, and can adversely affect the design, scope, plans and profitability of a project, which can negatively affect our financial condition and results of operations.

As a result of the formation transactions, our results of operations after May 2, 2016 are not comparable to our results of operations prior to that date because our results of operations prior to May 2, 2016 did not include the financial condition and results of operations of the San Francisco Venture and the management company, or our investment in the Great Park Venture. Consequently, our results of operations for the year ended December 31, 2016 includes eight months of results attributable to the San Francisco Venture and the

management company, and to our investment in the Great Park Venture, but our results of operations for the year ended December 31, 2015 does not include any results attributable to the San Francisco Venture, the management company or our investment in the Great Park Venture.

Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting policies are those applicable to the following:

The consolidated financial statements include the accounts of us and all subsidiaries in which we have a controlling interest and VIEs in which we are deemed to be the primary beneficiary. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We examine specific criteria and use our judgment when determining if we are the primary beneficiary of a VIE. Factors considered in determining whether we are the primary beneficiary include risk and reward sharing, experience and financial condition of other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s executive committee, existence of unilateral kick-out rights or voting rights, level of economic disproportionality between us and the other partner(s) and contracts to purchase assets from VIEs. Our consolidated financial statements include the consolidation of four VIEs, two of which were acquired in the formation transactions. The accounting policy relating to variable interest entities is a critical accounting policy because the determination of whether an entity is a VIE and, if so, whether we are primary beneficiary, may require us to exercise significant judgment.

We account for businesses we acquire in accordance with ASC Topic 805, Business Combinations. This methodology requires that assets acquired and liabilities assumed be recorded at their respective fair values on the date of acquisition. Accordingly, we recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities and non-controlling interest in the acquiree, based on the fair value estimates as of the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired, less liabilities assumed, is recorded as goodwill. The costs of business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists. Purchase price allocations may be preliminary and, during the measurement period, not to exceed one year from the date of acquisition, there may be changes in assumptions and estimates that result in adjustments to the fair values of assets acquired and liabilities assumed in the period the adjustments are determined. Contingent consideration assumed in a business combination is measured at fair value for each reporting period, and any change in the fair value, from either the passage of time or events occurring after the acquisition date, is recorded in the results of operations.

The estimated fair value of the acquired assets and assumed liabilities requires significant judgments by management. Based on the businesses that have been acquired, the most significant assets and liabilities requiring such judgments are inventories, intangible assets and related party liabilities.

For purposes of the formation transactions, the fair value of inventories was determined primarily by a discounted cash flow model. Projected cash flows are significantly affected by estimates of land sales prices, development costs and cost reimbursements. In forming such estimates, we make assumptions about market conditions that include the length of time and cost to complete the entitlements on our land, the cost of labor and materials to complete land development obligations, the type and size of homes and commercial buildings that

will be built on our land and the associated costs of labor and materials to construct those homes and commercial buildings, and the sales price of homes to residents. In determining these assumptions, we utilize historical trends and data from past development projects in addition to internal and external market studies and trends, which generally include analysis of population growth and household formations, job and wage growth, mortgage interest rates, home prices and the supply, price and inflation rates of raw materials.

The fair value of intangible assets and the ultimate settlement amount of certain related party liabilities of the businesses acquired are a function of future financial results and thus highly dependent on the cash flows that result from the development and sales of the Company’s owned and managed communities as described above. For purposes of the formation transactions, the fair values of these assumed liabilities and our related party EB-5 reimbursement obligation were determined primarily by a discounted cash flow model. The determination of fair value also requires discounting the estimated cash flows at a rate that we believe a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams.

We believe that the accounting policy related to business combinations is a critical accounting policy because (1) assumptions inherent in the valuation of assets acquired and liabilities assumed are highly subjective and (2) the impact of recognizing the assets acquired and liabilities assumed is expected to be material to our consolidated financial statements upon the acquisition date and going forward, with a continued impact on cost of sales and interest expense. Because of changes in economic and market conditions and assumptions and estimates required of management in valuing the components of the business combination, actual results could differ materially from management’s assumptions and may require material inventory impairment charges to be recorded in the future.

Revenues from land sales are recognized when a significant down payment is received, the earnings process is complete, title passes and the collectability of any receivable is reasonably assured. When we have an obligation to complete development on sold property, we utilize the percentage-of-completion method of accounting to record revenues, deferred revenues and earnings. Under percentage-of-completion accounting, revenues and earnings are recognized based upon the ratio of development cost completed to the estimated total cost of the property sold, provided that required sales recognition criteria have been met.

A portion of capitalized inventory costs is allocated to individual parcels within a project using the relative sales value method. Under the relative sales value method, each parcel in the project under development is allocated costs in proportion to the estimated overall sales prices of the project such that each parcel to be sold reflects the same gross profit margin. Since this method requires that we estimate the expected sales price for the entire project, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues, as well as any changes in the estimated total cost of the project.

Estimated costs include direct costs to complete development on the sold property in addition to indirect costs and certain cost reimbursements for infrastructure and amenities that benefit the entire project. Significant assumptions used to estimate total costs include engineering and construction estimates for such inputs as unit quantities, unit costs, labor costs and development timelines. Reimbursements received are predominately funded from CFD bond issuances or other tax increment financing arrangements. The estimate of proceeds available from reimbursement financing arrangements is impacted by home sale absorption and assessed values, and market demand for CFD bond issuances. Changes in estimated total cost of the property sold will impact the amount of revenue and profit recognized under percentage-of-completion accounting in the period in which they are determined and future periods. Estimated losses, if any, on sold property are recognized in the period in which such losses are determined.

Some of our residential homesite sale agreements contain a profit participation provision whereby we receive from homebuilders a portion of the home sales prices after the builder has received an agreed-upon

margin. If the project profitability falls short of the participation threshold, we receive no additional revenues or income and have no financial obligation to the builder. Revenues from profit participation are recognized when sufficient evidence exists that the homebuilding project has met the participation thresholds and the profit participations have been collected or are reasonably assured of collection. We will defer revenue on amounts collected in advance of meeting the recognition criteria. Any profit participation provision is evaluated each period to determine the portion earned, which portion would then be included in land sales in the consolidated statements of operations. In addition, some residential homesite sale agreements contain a provision requiring the homebuilder to pay a marketing fee per residence sold, as a percentage of the home sale price. Marketing fees are recognized as revenue when collected.

In addition, we record revenue from management services over the period in which the services are performed, fees are determinable and collectability is reasonably assured. We record revenues from annual fees ratably over the contract period using the straight-line method. In some of our development management agreements, we receive additional compensation equal to the actual general and administrative costs incurred by our project team.

Included in operating properties revenues in the consolidated statements of operations are revenues for our agriculture and energy operations and our golf club operation, Tournament Players Club at Valencia Golf Course.

We believe that the accounting policy related to revenue recognition is a critical accounting policy because of the significance of revenue, the complexity of estimates when utilizing the percentage-of-completion method and the significant degree of judgment in evaluating recognition criteria.

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. Impairment indicators for long-lived inventory assets include, but are not limited to, significant increases in land development costs, significant decreases in the pace and pricing of home sales within our communities and surrounding areas and political and societal events that may negatively impact the local economy. For operating properties, impairment indicators may include significant increases in operating costs, decreased utilization and continued net operating losses. If indicators of impairment exist, and the undiscounted cash flows expected to be generated by a long-lived asset are less than its carrying amount, an impairment charge is recorded to write down the carrying amount of such long-lived asset to its estimated fair value. We generally estimate the fair value of our long-lived assets using a discounted cash flow model, through appraisals of the underlying property or a combination thereof.

Our projected cash flows for each long-lived inventory asset are significantly affected by estimates and assumptions related to market supply and demand, the local economy, projected pace of sales of homesites, pricing and price appreciation over the estimated selling period, the length of the estimated development and selling periods, remaining development costs and other factors. For operating properties, our projected cash flows also include estimates and assumptions about the use and eventual disposition of such properties, including utilization, capital expenditures, operating expenses, and the amount of proceeds to be realized upon eventual disposition of such properties.

In determining these estimates and assumptions, we utilize historical trends from our past development projects, in addition to internal and external market studies and trends, which generally include, but are not limited to, statistics on population demographics and unemployment rates. Using all available information, we calculate our best estimate of projected cash flows for each asset. While many of the estimates are calculated based on historical and projected trends, all estimates are subjective and change as market and economic conditions change. The determination of fair value also requires discounting the estimated cash flows at a rate that we believe a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. The discount rate used in determining each asset’s fair value depends on the asset’s projected life and development stage.

Inventories primarily include land held for development and sale. Inventories are stated at cost, less reimbursements, unless the inventory within a community is determined to be impaired, in which case the impaired inventory would be written down to fair market value. Capitalized inventory costs include land, land development, real estate taxes and interest related to financing development and construction costs. Land development costs are further broken down to costs incurred to entitle and permit the land for its intended use; costs incurred for infrastructure projects, such as schools, sewers, roads and bridges; and site costs, such as grading and amenities, to prepare the land for sale. Project litigation costs are charged to expense when incurred. Costs that cannot be clearly associated with the acquisition, development and construction of a real estate project or related selling expense are expensed as incurred. Certain public infrastructure project costs incurred by us are eligible for reimbursement, typically, from the proceeds of CFD bond debt, tax increment financing, state or federal grants or property tax assessments.

A portion of capitalized inventory costs is allocated to individual parcels within a project using the relative sales value method. Under the relative sales value method, each parcel in the project under development is allocated costs in proportion to the estimated overall sales price of the project such that each parcel to be sold reflects the same gross profit margin. Since this method requires us to estimate the expected sales price for the entire project, the profit margin on subsequent parcels sold will be affected by both changes in the estimated total revenues and any changes in the estimated total cost of the project.

We believe that the accounting related to capitalization of inventory is a critical accounting policy because assumptions inherent in the determination of costs to be capitalized and assumptions used to estimate a project’s total revenues and total costs are subjective.

For investments in entities that we do not control but over which we exercise significant influence, we use the equity method of accounting. Our judgment with regard to our level of influence or control of an entity involves consideration of various factors including the form of our ownership interest, our representation in the entity’s governance, our ability to participate in policy-making decisions and the rights of other investors to participate in the decision-making process to us as manager or to liquidate the entity. Investments accounted for under the equity method of accounting are recorded at cost and adjusted for our share in the earnings (losses) of the venture and cash contributions and distributions. Any difference between the carrying amount of the equity method investment on our balance sheet and the underlying equity in net assets on the entity’s balance sheet results in a basis difference which is adjusted as the related underlying assets are depreciated, amortized or sold and the liabilities are settled. We generally allocate income and loss from unconsolidated entities based on the venture’s distribution priorities, which may be different from its stated ownership percentage.

We evaluate the recoverability of our investment in unconsolidated entities by first reviewing each investment for any indicators of impairment. If indicators are present, we estimate the fair value of the investment. If the carrying value of the investment is greater than the estimated fair value, management makes an assessment of whether the impairment is “temporary” or “other-than-temporary”. In making this assessment, management considers (1) the length of time and the extent to which fair value has been less than cost, (2) the financial condition and near-term prospects of the entity and (3) our intent and ability to retain our interest long enough for a recovery in market value. If management concludes that the impairment is “other than temporary,” we reduce the investment to its estimated fair value.

We believe that the accounting related to investments in unconsolidated entities is a critical accounting policy because (1) the impact of our share in our significant equity method investee is material to our financial statements and (2) we make significant estimates on the fair value of the investment to determine its recoverability.

We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and attributable to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax-planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse effect or beneficial effect on our income tax provision and net income or loss in the period the determination is made. We recognize interest or penalties related to income tax matters in income tax expense.

As described in the notes to our historical financial statements, new accounting pronouncements have been issued which are effective for the current year or subsequent years.

The following table summarizes our consolidated historical results of operations for the years ended December 31, 2016 and 2015.

Revenues. Revenues increased by $3.8 million, or 10.6%, to $39.4 million for the year ended December 31, 2016, from $35.6 million for the year ended December 31, 2015. We sold no residential homesites and approximately 0.8 acres of remnant commercial acres during 2016, and we sold no residential homesites or commercial acres in 2015. In 2016 and 2015, we generated revenues primarily from the recognition of deferred revenues on prior land sales, profit participation with residential homebuilders, collection of marketing fees and activities at our operating properties. In 2016, after completing the formation transactions, we also generated revenues from providing development management services to certain related parties. The increase in revenues was primarily attributable to higher development management services revenues earned from related party development management agreements, partially offset by lower deferred land sale revenues recognized in 2016 compared to 2015.

Management services costs and expenses. Certain of our development management agreements require us to employ a dedicated project team of employees to perform the services required under the agreement. Included within management costs and services are those costs and expenses incurred directly by the project team. We also include amortization expense related to the intangible asset attributed to the incentive compensation provisions of the development management agreement with the Great Park Venture in management services costs and expenses. Corporate and non-project team salaries and overhead are not allocated to management services costs and expenses and are reported in selling, general and administrative costs on the consolidated statement of operations. For the year ended December 31, 2016, direct project team costs and intangible asset amortization expense included in management services costs and expenses was $7.0 million and $2.1 million, respectively.

Selling, general and administrative. Selling general and administrative expenses increased by $93.1 million, or 338.1%, to $120.7 million for the year ended December 31, 2016, from $27.5 million for the year ended December 31, 2015. This increase was primarily due to an increase in compensation expense for 2016 as a result of share-based compensation expense of $27.7 million and bonus payments of $12.0 million incurred as part of the formation transactions. In addition we incurred $46.7 million in additional general and administrative expenses, including payroll expenses, in 2016 that were attributable to the acquired business operations of the San Francisco Venture and the corporate overhead of the management company. Legal and other professional expenses, primarily related to certain on-going legal matters, also increased by $3.9 million in 2016 over 2015.

Management fees. Management fees decreased by $3.4 million, or 66.4%, to $1.7 million for the year ended December 31, 2016, from $5.1 million for the year ended December 31, 2015. This decrease is due to the termination of our development management agreement for Newhall Ranch on May 2, 2016, as a result of our acquisition of the management company in the formation transactions.

Equity in loss from unconsolidated entity. We acquired a 37.5% percentage interest in the Great Park Venture in connection with the formation transactions. From the acquisition date of May 2, 2016 through December 31, 2016, we recognized $1.4 million in equity losses for our investment in the Great Park Venture. Our proportionate share of the Great Park Venture’s losses of $27.0 million was offset by the net accretion of the acquisition date basis difference between the fair value and the historical carrying value of the Great Park Venture’s net assets. Net accretion for the period was primarily attributable to the Great Park Venture’s recognition of incentive compensation expense attributable to the amended and restated development management agreement and recognition of revenues that were deferred as of the acquisition date.

Income tax benefit. The income tax benefit increased by $7.3 million, or 1,344.7%, to a benefit of $7.9 million for 2016, from a benefit of $0.5 million for 2015. The increase in income tax benefit was primarily attributable to a $100.1 million increase in pre-tax loss to $104.5 million for 2016, from $4.4 million of pre-tax loss for 2015. This increase was partially offset by a lower effective tax rate of approximately 7.6% for 2016 compared to a rate of approximately 12.5% for 2015. Our effective tax rate for 2016 declined primarily due to a decrease in Five Point’s ownership interest in the operating company and resulting reduced allocation of pre-tax

income or loss and an increase in our deferred tax asset valuation allowance of $8.9 million during 2016 because we believe it is more likely than not that the net deferred tax asset at December 31, 2016 will not be realized.

Our three reportable segments are Newhall, San Francisco and Great Park. Our Newhall segment includes operating results for the Newhall Ranch community, as well as results attributable to other land historically owned by FPL, including 16,000 acres in Ventura County, The Tournament Players Club at Valencia Golf Course, 500 acres of remnant commercial, residential and open space land in Los Angeles County and our community in Sacramento, California. Our San Francisco segment includes operating results for The San Francisco Shipyard and Candlestick Point community, as well as results attributable to the development management services that we provide to Lennar with respect to the Treasure Island and Concord communities. Our Great Park segment includes operating results for the Great Park Neighborhoods community and the management company, which provides development management services for the Great Park Neighborhoods.

Newhall Ranch consists of approximately 15,000 acres in one of the last growth corridors of northern Los Angeles County. Newhall Ranch is designed to include approximately 21,500 homesites and approximately 11.5 million square feet of commercial space within this community. Newhall Ranch is directly adjacent to our completed, award-winning Valencia master-planned community, where today approximately 20,000 households reside and approximately 60,000 people work.

On November 30, 2015, the Supreme Court of California issued a ruling under CEQA and other state statutes, which requires the CDFW to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the EIR for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous related approvals. Although the Supreme Court’s ruling does not include any monetary damage awards, it has resulted in the need to reassess certain elements of the project’s potential impacts, and will result in the need to modify certain aspects (such as specific mitigation measures or project design features) related to the development plan for Newhall Ranch, and which could reduce the number of homesites or amount of commercial square feet we are able to develop, increase our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project, or adversely affect the length of time or the cost required to obtain CDFW’s approval of the corrected EIR. In addition, the ruling has resulted in delays in construction that have been taken into account in our currently anticipated delivery dates (see “Business and Properties—Newhall Ranch—Development Status”), but could result in further delays beyond those currently anticipated and reflected in our anticipated delivery dates, or changes in the sequencing of our communities, and are likely to increase our development costs. We also are involved in related lawsuits regarding the approvals and permits that have been issued for the Mission Village and Landmark Village development areas within Newhall Ranch, which could result in similar impacts. We continue to assess when and under what circumstances we may begin infrastructure development at Newhall Ranch based on the status of these pending lawsuits. See “Business and Properties—Legal Proceedings.” For additional information about the status of development at Newhall Ranch, see “Business and Properties—Our Communities—Newhall Ranch—Development Status.”

Our Newhall segment also includes results attributable to other land historically owned by FPL. For additional information about these other properties, see “Business and Properties—Other Properties.”

The following table summarizes the results of operations of our Newhall segment for the years ended December 31, 2016 and 2015.

Revenues. Revenues decreased by $13.5 million, or 38.0%, to $22.0 million for the year ended December 31, 2016, from $35.6 million for the year ended December 31, 2015. The decrease was primarily attributable to lower deferred land sale revenues being recognized in 2016 compared to the same period in 2015. We sold no residential homesites and closed escrow on approximately 0.8 acres of remnant commercial acres during 2016, and we sold no homesites or commercial acres in 2015.

Land sales costs. Land sales costs increased by $3.2 million to $0.4 million for the 2016, from a benefit of $2.9 million for 2015. As no homesites or commercial net acres closed escrow, the increase was primarily attributable to changes in estimates of costs to complete closed projects.

Selling, general and administrative. Selling general and administrative expenses increased by $12.0 million, or 60.2%, to $32.0 million for 2016, from $20.0 million for 2015. This increase was primarily due to increased legal expenses related to certain on-going legal matters.

Management fees. Management fees decreased by $3.4 million, or 66.4%, to $1.7 million for the year ended December 31, 2016, from $5.1 million for the year ended December 31, 2015. This decrease is due to the termination of our development management agreement for Newhall Ranch on May 2, 2016 as a result of our acquisition of the management company in connection with the formation transaction.

In the formation transactions, our subsidiary, the operating company, acquired a controlling interest in, and became the manager of, the San Francisco Venture. As a result, the San Francisco Venture, which is developing The San Francisco Shipyard and Candlestick Point, is now our consolidated subsidiary.

Located almost equidistant between downtown San Francisco and the San Francisco International Airport, The San Francisco Shipyard and Candlestick Point consists of approximately 800 acres of bayfront property in the City of San Francisco. The San Francisco Shipyard and Candlestick Point is designed to include approximately 12,000 homesites and approximately 4.1 million square feet of commercial space, making this community the largest development of its type in the history of San Francisco. In 2017, we intend to seek approval from governmental authorities to increase total commercial space (including retail, hotels, artists’ studios, maker space, community uses and schools) in this community from approximately 4.1 million square feet to approximately 6.6 million square feet.

In 2013, prior to our acquisition, the San Francisco Venture commenced land development and began selling homes in April 2015. In November 2014, the San Francisco Venture also entered into a joint venture agreement with Macerich to construct an approximately 550,000 square foot urban retail outlet shopping district at Candlestick Point.

The San Francisco Venture built the initial homes at The San Francisco Shipyard and Candlestick Point. As of May 2, 2016, the San Francisco Venture had sold 107 homes (including 9 affordable homes) and entered into contracts to sell 73 additional homes (including 11 affordable homes) for total aggregate consideration of approximately $117.4 million. On May 2, 2016, the San Francisco Venture transferred to the Lennar-CL Venture a property known as the Phase 1 Land, as well as all responsibility for current and future residential construction on the Phase 1 Land. See “Certain Relationships and Related Party Transactions—San Francisco Venture Transactions.” We are not entitled to any of the proceeds from future sales of homes on the Phase 1 Land (although we will receive a marketing fee for each home sold). For additional information about the land that was transferred to the Lennar-CL Venture and the land that was retained by the San Francisco Venture, see “Business and Properties—The San Francisco Shipyard and Candlestick Point—Development Status.”

At the San Francisco Shipyard, approximately 408 acres will not be conveyed until the U.S. Navy satisfactorily completes its finding of suitability to transfer process, which involves multiple levels of environmental and governmental investigation, analysis, review, comment and approval. Based on our discussions with the U.S. Navy and a final federal facility agreement schedule for 2017 prepared by the U.S. Navy, we expect the U.S. Navy to deliver approximately 94 acres in 2018, 138 acres in 2019, 47 acres in 2020 and 129 acres in 2022. It is possible that the finding of suitability to transfer process could delay or impede the scheduled transfer of these parcels, which would in turn delay or impede our future development of such parcels. For more information on the finding of suitability to transfer process, please see “Regulation—FOST Process.” For additional information about the status of development at The San Francisco Shipyard and Candlestick Point, see “Business and Properties—Our Communities—The San Francisco Shipyard and Candlestick Point—Development Status.”

We have entered into development management agreements to provide development management services with respect to the Treasure Island and Concord communities and the property owned by the Lennar-CL Venture, in each of which Lennar is an investor. These agreements include a monthly base fee and, in some cases, include a reimbursement for defined project team costs. Our San Francisco segment includes results attributable to these agreements. For additional information about the development management agreements, see “Business and Properties—Development Management Services.”

The following table summarizes the results of operations of our San Francisco segment for the period from May 2, 2016 to December 31, 2016.

Total revenues. The San Francisco Venture has entered into development management agreements to provide development management services with respect to the Treasure Island and Concord communities and the property owned by the Lennar-CL Venture, in each of which related parties have interests. These development management agreements include a monthly base fee and, in some cases, a reimbursement obligation for defined project team costs. Total revenues for the period include $3.5 million for such related party management services and $0.4 million of builder marketing fees received from related parties.

Management services costs and expenses. Included within management services costs and expenses are those costs and expenses incurred directly by the San Francisco segment’s project team dedicated to providing development management services with respect to the Concord community. Non-project team salaries and indirect overhead are not allocated to management services costs and expenses and are reported in selling, general and administrative costs in the statement of operations data of the San Francisco segment shown above.

Selling, general and administrative. Selling, general and administrative expenses were primarily comprised of employee related costs of $10.4 million, and legal and professional fees, including marketing expense, of $4.9 million.

In the formation transactions, we acquired a 37.5% percentage interest in the Great Park Venture, and account for our investment using the equity method of accounting. At the same time, we also acquired all of the interests in the management company, an entity which performs development management services at Great Park Neighborhoods. Because we own and control the management company, we view financial information for the Great Park Venture in its entirety, and not just our equity interest in it. Our Great Park segment consists of the operations of both the Great Park Venture and the management company.

Great Park Neighborhoods consists of approximately 2,100 acres in Orange County and is being built around the approximately 1,300 acre Orange County Great Park, a metropolitan public park that is under construction and, upon completion, will be nearly twice the size of New York’s Central Park. Great Park Neighborhoods is designed to include approximately 9,500 homesites and approximately 4.9 million square feet of commercial space.

The Great Park Venture sold the first homesites in April 2013 and, as of December 31, 2016, had sold 3,866 homesites (including 544 affordable homesites) and commercial land allowing for development of up to 2 million square feet of commercial (research and development) space for aggregate consideration of approximately $1.68 billion. For additional information about the status of development at Great Park Neighborhoods, see “Business and Properties—Our Communities—Great Park Neighborhoods—Development Status.”

The following table summarizes the results of operations of our Great Park segment for the period from May 2, 2016 to December 31, 2016.

Total revenues. Subsequent to May 2, 2016, revenues from the Great Park Venture were generated from the sale of 26 homesites in addition to the recognition of deferred land sale revenue and builder marketing fees. As part of the acquisition of the management company in connection with the formation transactions, we assumed an agreement to provide development management services to the Great Park Venture. Under this agreement, we receive a base management fee, reimbursement for certain defined project team costs and the right to receive certain defined incentive compensation upon the achievement of certain milestones. Related party management fee services include amounts for both the base fee and the project team reimbursements as well as amounts for incentive compensation earned after May 2, 2016.

Land sales costs. Cost of land sales was attributable to recognition of deferred revenue and the cost of land sale revenues generated from the sale of homesites that closed escrow in the period.

Management services costs and expenses. Included within management services costs and expenses are those costs and expenses incurred directly by the project team managing the development of the Great Park Neighborhoods. Also included is amortization expense of $2.1 million related to the intangible asset attributable to the incentive compensation provisions of the development management agreement that the management company has with the Great Park Venture.

Selling, general and administrative. Selling, general and administrative expenses are comprised of the Great Park Venture’s marketing related costs, project team costs and other administrative costs.

Management fees. Management fees are comprised of $71.3 million of incentive compensation, of which $58.3 million related to the management company and $13.0 million related to the Great Park Venture’s commercial sub-manager, and $4.0 million of base fee management expense.

Interest income. Interest income was primarily comprised of interest earned on a note receivable provided as part of a related party homesite sale that closed escrow prior to May 2, 2016. The note receivable was collected in full on December 5, 2016.

The table below reconciles the Great Park segment results to the equity in loss from unconsolidated entity reflected in the consolidated statement of operations for the period from May 2, 2016 to December 31, 2016.

As of December 31, 2016, we had $62.3 million of consolidated cash and cash equivalents. Our short-term liquidity needs consist primarily of operating expenses and development expenditures. The development stages of our master-planned communities continue to require significant cash outlays. Cash flows from operating activities are expected to vary significantly as revenues are primarily generated by land sales. However, we expect to meet our short-term liquidity requirements with available cash, cash flows from our communities and reimbursements from public financing, including CFDs, tax increment financing and local, state and federal grants. In addition, we received an additional capital contribution of $30 million from the prior owners of the San Francisco Venture, affiliates of Lennar and Castlelake, in early 2017. Concurrently with the completion of this offering, Lennar has agreed to purchase $100 million of Class A units of the operating company in a private placement at a price per unit equal to the initial public offering price per Class A common share. We anticipate that these capital resources will be sufficient to meet our liquidity requirements for at least the next 12 months.

Our long-term liquidity needs relate primarily to future development expenditures, and vertical construction costs for commercial and multi-family properties that we may retain for our income-producing portfolio. We budget our cash development costs on an annual basis. Budgeted amounts are expected to be funded through a combination of available cash, cash flows from our communities and reimbursements from public financing, including CFDs, tax increment financing and local, state and federal grants. Budgeted amounts are subject to change due to delays or accelerations in construction or regulatory approvals, changes in inflation rates and other increases (or decreases) in costs. We may also modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

Taking into account the net proceeds of this offering and the concurrent private placement, we currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan for several years. However, we may experience cost increases, our plans may change or circumstances may arise that result in our needing additional capital to execute our development plan. In addition, the level of capital expenditures in any given year may vary due to, among other things, the number of

communities or neighborhoods under development and the number of planned deliveries, which may vary based on market conditions. We may seek to raise additional capital by accessing the debt or equity capital markets or with one or more revolving or term loan facilities or other public or private financing alternatives. These financings may not be available on attractive terms, or at all.

On April 18, 2017, the operating company entered into a $50 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) with ZB, N.A. dba California Bank & Trust. The Revolving Credit Facility provides for borrowings and issuances of letters of credit in an aggregate amount of up to $50 million initially, with an accordion feature that will allow the operating company to increase the maximum aggregate amount to $100 million, subject to certain conditions, including receipt of commitments. The Revolving Credit Facility matures in two years, with two options for the operating company to extend the maturity date, in each case, by an additional year, subject to the satisfaction of certain conditions including the approval of the administrative agent and lenders. Borrowings under the Revolving Credit Facility bear interest at LIBOR plus a margin ranging from 1.75% to 2.00% based on the operating company’s leverage ratio. No funds have been drawn on the Revolving Credit Facility.

The following table sets forth certain information with respect to our outstanding indebtedness as of December 31, 2016:

Simultaneous with, but separate and apart from the formation transactions, we entered into a tax receivable agreement with the holders of Class A units of the operating company and the holders of Class A units of the San Francisco Venture. The tax receivable agreement provides for payments by us to such investors or their successors in aggregate amounts equal to 85% of the cash savings, if any, in income tax that we realize as a result of (a) increases in tax basis that are attributable to exchanges of Class A units of the operating company for our Class A common shares or cash or certain other taxable acquisitions of equity interests by the Company, (b) allocations that result from the application of the principles of Section 704(c) of the Code and (c) tax benefits related to imputed interest or guaranteed payments deemed to be paid or incurred by us as a result of the tax receivable agreement.

The following table outlines the primary components of our cash flows (in thousands):

Cash Flows from Operating Activities. Cash flows from operating activities are primarily comprised of cash inflows from land sales offset by cash outlays for land development costs, employee compensation, management fees and selling, general administration costs. Our operating cash flows vary significantly each year due to the timing of land sales and the development efforts related to our master-planned communities.

Net cash used in operating activities increased $83.3 million for the year ended December 31, 2016 compared to the year ended December 31, 2015 due to:

Cash Flows from Investing Activities. Net cash provided by investing activities was $83.3 million for the year ended December 31, 2016, an increase of $78.9 million compared with net cash provided by investing activities of $4.4 million for the year ended December 31, 2015.

For 2016, we received $25.0 million from the maturity of investments, of which $20.8 million was reinvested in fixed income investments, $3.2 million in connection with the formation transactions and $90.0 million from the first, second and third installments of the capital contribution provided by the prior owners of the San Francisco Venture. Partially offsetting this, we paid a related party $14.6 million in connection with the separation agreement relating to the San Francisco Venture. For the year ended December 31, 2015, net cash provided by investing activities primarily related to $43.0 million in proceeds from the maturity of investments, of which $37.5 million was reinvested in fixed income investments.

Cash Flows from Financing Activities. Cash used in financing activities was $5.0 million for the year ended December 31, 2016, a decrease of $1.5 million compared to $6.6 million net cash used in financing activities for the year ended December 31, 2015. Cash used during 2016 was primarily related to a $5.0 million principal payment on a promissory note, partially offset by $0.5 million in proceeds received from the sale of Class B common shares in connection with the formation transactions.

Cash flows used in financing activities of $6.6 million for 2015 were primarily attributable to costs of our proposed public offering.

The following table aggregates our contractual obligations and commitments as of December 31, 2016:

The following contractual obligation payments are not included in the table above due to the contingent nature and timing of the payment obligations. Unless otherwise stated, all of the below contractual obligation payments are as of December 31, 2016.

Our promissory note issued to an affiliate of Macerich in the amount of $65.1 million will mature on December 31, 2018 unless it has been contributed to the joint venture with Macerich. The Macerich note is only due and payable in the event of a termination of the joint venture. Therefore, the note is not included in the table above because we deem the possibility of repayment remote.

We are obligated to make aggregate payments of approximately $24.3 million related to the completion of development activities associated with prior land sales, which payments become due upon the occurrence of certain events and the completion of specified development work.

We have future payments for contributions related to our defined benefit pension plan, which we estimate will include contributions of $0.5 million over the next twelve months. In 2004, our defined benefit pension plan was amended to cease future benefit accruals for services provided by participants of the plan and to close the plan to new participants.

We have $7.8 million of initiation fee refund obligations for our golf operations. Each initiation fee generally is fully refundable 30 years from the date a member joins the golf club or upon resignation when certain conditions are met as outlined in the membership agreement.

We are committed under various letters of credit (“LOCs”) to perform certain development activities and provide certain guarantees in the normal course of business. Outstanding LOCs totaled $13.8 million and $3.8 million at December 31, 2016 and 2015, respectively. At December 31, 2016 and 2015, we had $2.2 million and $3.8 million, respectively, in restricted cash and certificates of deposit securing certain of our LOCs.

As required by the disposition and development agreements (the “DDAs”) between the San Francisco Venture and the San Francisco Agency, the San Francisco Venture has given two guarantees to the San Francisco Agency, limited to a maximum of $5.5 million per guaranty. In connection with the San Francisco Venture transactions, Lennar has agreed to replace one of the guarantees provided by the San Francisco Venture to the San Francisco Agency and to indemnify the San Francisco Venture for any losses incurred with respect to such guaranty. Pursuant to the DDAs, the San Francisco Venture provided the San Francisco Agency with a guaranty of infrastructure obligations with a maximum obligation of $21.4 million in April 2014, and an additional guaranty of infrastructure obligations was made with a maximum obligation of $8.1 million in March 2016.

Our business and results of operations are not materially impacted by seasonality.

Inflation poses a risk to our business due to the possibility that higher prices would increase our development expenditures. In particular, our development expenditures are influenced by the price of oil, which is used in our development activities, including grading and paving roads. However, inflation can also indirectly improve our revenues by increasing the amount that homebuyers and commercial buyers are willing to pay for newly constructed homes and commercial buildings, which in turn, increases the amount that homebuilders and commercial developers are willing to pay for our residential and commercial lots. In addition, because sales of homesites typically include participation provisions that allow us to share in the profits realized by the homebuilders if the overall profitability of a block of homes exceeds an agreed-upon margin, we may be able to receive additional benefit in the event of inflation.

Market risk is the risk of loss from adverse changes in market prices and interest rates. Our future earnings, cash flows and fair values relative to financial instruments are dependent upon prevailing market interest rates. Our primary market risk results from our indebtedness, which bears interest at both fixed and floating rates. Although we do not currently do so, we may in the future manage our market risk on floating rate debt by entering into swap arrangements to in effect fix the rate on all or a portion of the debt for varying periods up to maturity. This would, in turn, reduce the risks of variability of cash flows created by floating rate debt and mitigate the risk of increases in interest rates. Our objective when undertaking such arrangements would be to reduce our floating rate exposure, as we do not plan to enter into hedging arrangements for speculative purposes.

As of December 31, 2016, we had outstanding consolidated indebtedness of $69.4 million, $65.1 million of which bears interest based on floating interest rates. If the relevant rates used to determine the interest rates on this floating rate indebtedness were to increase (or decrease) by 100 basis points, the interest expense would increase (or decrease) by approximately $0.7 million annually.

We have not entered into any transactions using derivative financial instruments or derivative commodity instruments.

Our management team has an expansive planning and development skill set, including expertise in managing public-private partnerships and navigating the difficult and complicated entitlement process in California. Key members of our management team have worked together for 10 to 25 years and have overseen the development of our communities from inception. Prior to the formation of the management company in 2009, our management team was an integral part of the team responsible for developing and implementing land strategies on the west coast for Lennar, one of the nation’s largest homebuilders. The collective experience of our team is a key factor in our ability to design and successfully execute the development plans for our communities, and to make new opportunistic investments. Since 2009, our management team has obtained vested tentative tract maps for over 17,000 homesites in our communities. See “—Our Communities—Development Status” below for more information regarding the status of our communities’ entitlements.

We believe the following strengths will provide us with a significant competitive advantage in implementing our business strategy:

Attractive Locations in Desirable and Supply Constrained California Coastal Markets

Our three communities are located in Los Angeles County, San Francisco County and Orange County, each of which exhibits favorable economic, demographic and employment trends, which are expected to continue to drive future housing demand. All three markets have exhibited strong employment growth, driven in part by exposure to technology sector investment and the Asia-Pacific trade corridor, as evidenced by the ratio of number of jobs added to number of homebuilding permits issued. In 2016, the employment growth-to-homebuilding permits issued ratios were 4.24, 5.45 and 3.66 for Los Angeles County, Bay Area Counties and Orange County, respectively. According to JBREC, household growth is expected to remain a key demand driver through 2018 due to continued population and employment growth. Los Angeles County, the Bay Area Counties and Orange County are expected to experience average annual household growth within a range of 23,900—24,700 households, 7,600—8,000 households and 11,100—11,200 households, respectively, through 2019. All three markets are also seeing strong demand for commercial space, as evidenced by vacancy rates for office properties declining to 13.4%, 9.4% and 16.0% in Los Angeles County, the Bay Area Counties and Orange County, respectively, in the third quarter of 2016. These factors, among others, should continue to drive housing and commercial demand in the coastal California markets where our communities are located. Furthermore, the limited supply of land available for development in these markets, and the difficult, time consuming and expensive process to obtain new entitlements in California, act as high barriers to entry for competition.

We believe that our scale, as measured by entitled residential and commercial land, uniquely positions us within the real estate industry on the west coast. We own, or have the right to acquire, substantially all of the undeveloped land in all three of our communities where we are entitled to build approximately 40,000 residential homes and 21 million square feet of commercial space, which makes us the largest owner and developer of mixed-use, master-planned communities in coastal California. Our existing general plan and zoning approvals give us varying degrees of flexibility in determining the types of homes and commercial buildings that will be constructed, as well as the location of such buildings in different development areas within our communities. As a result, we are able to modify our planning in response to changing economic conditions, consumer preferences and other factors.

Our Chairman and Chief Executive Officer, Mr. Haddad, has worked in the real estate development industry for over 30 years, including as the Chief Investment Officer of Lennar, one of the nation’s largest homebuilders, where he was responsible for land strategy, real estate investments and asset management on the west coast. He is regarded nationally as a leading land expert and a skillful negotiator of complex transactions with competing

priorities. Along with Mr. Haddad, key members of our management team, including Mr. Higgins, Mr. White, Ms. Jochim, Mr. McWilliams and Mr. Bonner, along with senior members of the project teams, have worked together for 10 to 25 years on several coastal California communities, including Stevenson Ranch (in Los Angeles County), Windemere (in Contra Costa County) and Coto de Caza (in Orange County), and the acquisition, entitlement, planning and development of all three of our communities. The collective experience of our team is wide-ranging and includes community development, urban and infill redevelopment and military base reuse, enabling us to manage complex entitlements and long-term development projects, and to make new opportunistic investments. We also have demonstrated an ability to successfully re-allocate our management resources as large-scale projects progress. For example, in 2005, our Regional President—Southern California, Mr. McWilliams, was relocated from San Francisco to lead Newhall Ranch, and our Executive Vice President, Ms. Jochim, was promoted to lead the San Francisco East Bay, while our Regional President—Northern California, Mr. Bonner, was promoted to head The San Francisco Shipyard and Candlestick Point. In 2006, Ms. Jochim moved to Orange County to oversee Great Park Neighborhoods.

Horizontal Development (Infrastructure). We refer to the process of preparing the land for construction of homes or commercial buildings as “horizontal development.” This involves significant investments in a community’s infrastructure and common improvements, including grading and installing roads, sidewalks, gutters, utility improvements (such as storm drains, water, gas, sewer, power and communications), landscaping and shared amenities (such as community buildings, neighborhood parks, trails and open spaces) and other actions necessary to prepare residential and commercial lots for vertical development.

various holiday festivities. For example, at Great Park Neighborhoods, we held a pumpkin carving event that set an official Guinness World Record for the longest line of carved pumpkins. We plan and program all of our events with a goal of building a community that transcends the physical features of our development and connects neighbors through their interests. We believe community building efforts create loyal residents that can become repeat customers within our multi-generational communities.

We are engaged in the business of planning and developing our three mixed-use, master-planned communities. In order to maximize the value of these communities, we intend to:

We offer a range of housing types, sizes and prices in neighborhoods within our communities, which are intended to appeal to different segments of homebuyers across a wide range of life phases. We believe our segmentation approach optimizes the pace of homesite sales, which we refer to as “absorption,” and the pricing of homes within our communities because the different product types being sold at any one time are not directly competitive with each other. It also enhances the character of the neighborhoods within our communities, attracting residents of diverse ages and incomes. Within the scope of our existing entitlements, we have the ability to modify the types of homes offered within our communities, and intend to do so as we deem appropriate to optimize absorption rates and land values.

Adjust Neighborhood Composition to Respond to Changing Economic Circumstances

other market dynamics in order to maximize the value of our underlying land. In addition to changing the types of housing offered, we may offer new amenities, modify the types of commercial development that we undertake or change the particular uses of land parcels within different development areas of a single community. We also manage the timing of our land sales based on market conditions in order to maximize the long-term value of our communities.

We plan our communities with the goal of achieving a desirable balance between jobs and housing. Each of our communities will include a mix of residential and commercial properties, which we expect will generate a significant number of jobs within our communities. We sold approximately 73 net acres in Great Park Neighborhoods to a subsidiary of Broadcom Corporation, which currently has approximately one million square feet of its campus under construction, where its Irvine workforce will be based. At Candlestick Point, we have the right to acquire an interest in a joint venture with Macerich to construct an approximately 550,000 square foot outdoor urban outlet mall. At Newhall Ranch, we expect to add approximately 11.5 million square feet of commercial space. The inclusion of office and retail properties enables us to achieve an appropriate balance between jobs and housing within our communities.

Taking into account the net proceeds of this offering and the concurrent private placement, we currently expect to have sufficient capital to fund the horizontal development of our communities in accordance with our development plan for several years. However, we will continue to utilize multiple public and private financing strategies, including secured mortgage financing for vertical construction projects, CFDs, tax increment

financing at The San Francisco Shipyard and Candlestick Point and state and federal grants, to reduce the privately funded portion of total development costs. CFDs are established when local government agencies impose a special property tax on real estate located within a specific district, sell bonds backed by future tax proceeds and use the net proceeds to pay for public improvements, including streets, water, sewage, drainage, electricity, schools, parks and fire and police protection. For tax increment financing, the amount of property tax that a specific district generates is set at a base amount and, as property values increase, property tax growth above that base amount, net of property taxes retained by municipal agencies, is used to fund redevelopment projects within the district.

We seek to develop our communities in a cost efficient manner. We have in-house engineers, contractors and geologists who are actively engaged in evaluating our grading and infrastructure plans to ensure that we minimize the time and costs associated with our development activities. Our experience, combined with the size of our communities, allows us to negotiate favorable terms with suppliers and contractors and keep tight controls over budgets. We typically select suppliers and contractors through a competitive bidding process in which we request proposals from suppliers and contractors that have demonstrated reliable service and quality.

Land & Farming has been operating in California for over 130 years and recently completed the development of Valencia, a mixed-use, master-planned community directly adjacent to Newhall Ranch, which it began developing in the 1960s on a portion of Newhall Land & Farming’s original 48,000 acres known as Rancho San Francisco.

Valencia, which encompasses 15,000 acres, is one of the premier mixed-use, master-planned communities in the nation and the regional center for north Los Angeles County, with approximately 20,000 homes and approximately 25 million square feet of commercial and industrial space. As a result of a comprehensive master-plan, Valencia is a balanced, sustainable community with top-rated primary and secondary schools, two higher education institutions, 15 parks, approximately 3,000 acres of open space, three golf courses, quality health care including a community hospital and trauma center, convenient public services and dynamic choices in shopping and entertainment. All of Valencia’s neighborhoods are connected to schools, parks and shopping by over 30 miles of paths and bridges known as paseos. Valencia has received a number of prestigious awards including multiple “Top 10 Master Planned Communities in the Nation” (JBREC), multiple “Top 10 Safest City in the Nation” (FBI statistics) and a “Best Place to Live in California” (CNN Money Magazine). Valencia’s position as one of the nation’s most respected mixed-use, master-planned communities is testament to the vision and thoughtful planning that was the inspiration for Valencia from the start. We do not anticipate selling additional residential land at Valencia.

Our development of Newhall Ranch is designed to implement the latest in sustainability, low impact development, green building, energy and water conservation and renewable energy resources. We are working with the California Department of Fish & Wildlife and the County of Los Angeles on the “Net Zero Newhall” initiative, a commitment to eliminate Newhall Ranch’s net greenhouse gas emissions through innovations at the community and within the County of Los Angeles, California, as well as funding direct emissions reduction activities. Additionally, at Newhall, we plan to build an advanced water recycling plant, which will help supply a significant amount of recycled water to our community. We also plan to preserve and protect key local habitat areas, including the Santa Clara River, spineflower preserves, the High Country, which exceeds the size of Los Angeles’ Griffith Park and New York’s Central Park combined, and other important natural resources. We have committed to donate more than 10,000 acres of natural open space land to public agencies and natural land management organizations and have also established over $12 million of endowment funding for native habitat enhancement and long-term conservation.

Newhall Land & Farming was a public company, with shares traded on the NYSE, from 1970 until January 2004, when it was acquired by a joint venture between Lennar and LNR for approximately $1 billion under the direction of Mr. Haddad. Subsequently, other entities transferred additional assets to the joint venture, which was led by Mr. McWilliams, and the joint venture obtained $1.6 billion of non-recourse financing, part of which was distributed to Lennar and LNR. In June 2008, the joint venture and a number of its subsidiaries (including Newhall Land & Farming) commenced proceedings under Chapter 11 and, in July 2009, the United States Bankruptcy Court for the District of Delaware confirmed a plan of reorganization for the joint venture and its subsidiaries that had participated in the Chapter 11 proceedings. As a result of the bankruptcy proceedings, the reorganized entity, named Newhall Land Development, LLC, emerged from Chapter 11 with all of its employees and assets, including the property on which Newhall Ranch is being developed, and free of its previous bank debt. As part of the reorganization, the creditors selected Mr. Haddad and the existing

management team to manage the communities owned by Newhall Land & Farming, including Newhall Ranch, and the management company was formed.

Newhall Ranch is located on approximately 15,000 acres in an unincorporated portion of Los Angeles County along the Santa Clara River in the western portion of the Santa Clarita Valley. The property is located approximately 35 miles northwest of downtown Los Angeles, 15 miles north of the San Fernando Valley and is adjacent to the City of Santa Clarita in one of the last remaining growth corridors in Los Angeles County. The City of Santa Clarita is the third largest city in Los Angeles County with a population of just over 200,000 people, according to the California Department of Finance. Newhall Ranch is adjacent to Interstate 5 and State Highway 126 and provides convenient access to the Santa Clarita Transit buses and the Metrolink trains. Newhall Ranch is also approximately 45 miles north of the Los Angeles International Airport (LAX) and 21 miles northwest of the Bob Hope Airport (BUR) in Burbank.

The City of Santa Clarita is conveniently located near the major job centers in the San Fernando Valley, Burbank, Glendale, West Los Angeles, Santa Monica and Downtown Los Angeles.

According to the U.S. Census, during 2016, Los Angeles County had a population of over 10 million, making it the most populous county in California. Housing fundamentals in the area have shown substantial improvement in recent years, supported by a supply constrained market with rising new home prices, strong job growth, rising median income levels and low levels of resale housing inventory. Between 2011 and 2016, Los Angeles County added 439,000 jobs, representing growth of 11.2%, and JBREC expects an average annual job growth rate of 1.2% between 2017 and 2019. During 2016, Los Angeles County added approximately 30,000 new residents, which JBREC expects to increase to approximately 35,900 residents per year through 2019.

Major employers in Valencia include Woodward HRT, Inc., Boston Scientific Corporation, Advanced Bionics LLC, Quest Diagnostics Incorporated, and Aerospace Dynamics International, Inc. The City of Santa Clarita is also home to the corporate headquarters of Princess Cruises, and Sunkist Growers, Incorporated. Seventeen soundstages are located throughout Valencia’s business parks to service the significant filming that occurs within the community. The Walt Disney Company and ABC Studios plan to commence construction in the near future on new high-tech sound stages and associated production support facilities within their 890 acre Golden Acre Ranch in the Santa Clarita Valley. Newhall Ranch is also estimated to bring a significant number of jobs to the region.

In 2016, the City of Santa Clarita was named “Most Business Friendly City in Los Angeles County” in large city category (LA County Economic Development Corporation).

From August 1, 2009 to December 31, 2016, we incurred approximately $277 million of development costs (which consist of costs for land, land improvements and capitalized real estate taxes and interest) related to Newhall Ranch. None of these costs relate to previously sold properties.

We budget our cash development costs on an annual basis. Our budget for calendar year 2017 allocates $61 million of cash for the development of Newhall Ranch. These budgeted amounts are expected to be funded through a combination of available cash and reimbursements from public financing, including CFDs or local, state and federal grants. Our budget for 2017 is subject to change by a material amount, due to, among other things, delays or acceleration in construction or regulatory approvals, including as a result of our ongoing legal proceedings, changes in inflation rates and other increases (or decreases) in costs. We may also modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

On November 30, 2015, the Supreme Court of California issued a ruling under CEQA and other state statutes, which requires the CDFW to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the EIR for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous approvals. Although the Supreme Court’s ruling does not include any monetary damage awards, it has resulted in the need to reassess certain elements of the project’s potential impacts, and will result in the need to modify certain aspects (such as specific mitigation measures or project design features) related to the development plan for Newhall Ranch, and which could reduce the number of homesites or amount of commercial square feet we are able to develop, increase costs or increase our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project, or adversely affect the length of time or the cost required to obtain CDFW’s approval of the corrected EIR. In addition, the ruling has resulted in delays in construction that have been taken into account in our anticipated delivery dates reflected in the table below and could result in further delays beyond those currently anticipated and reflected in our anticipated delivery dates, or changes in the sequencing of our communities. For more information, see “—Legal Proceedings.”

The table below summarizes entitlement and development activity at Newhall Ranch as of December 31, 2016. We may modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

A “general plan” is a county or city’s basic planning document that governs physical development and land uses within a county or city; in this case, Los Angeles County.

“Zoning” generally refers to the division of an area into zones for purposes of regulating the number and types of buildings and their uses; in this case, the zoning is governed by the Newhall Ranch Specific Plan for certain areas within Newhall Ranch and Los Angeles County’s One Valley One Vision Area Plan in other areas within Newhall Ranch.

“VTTM” is a vesting tentative tract map that approves the division of property into separate legal lots for sale or lease (subject to the satisfaction of specified conditions of approval) and, upon approval, confers a vested right to proceed with the subdivision development in accordance with the ordinances, policies, and standards in effect at the time the application for the vesting tentative tract map was deemed complete.

“Final maps” regulate and control the design and improvements within subdivisions, and must substantially conform to previously-approved vesting tentative tract maps. If the final map substantially conforms to the previously approved vesting tentative tract map and the conditions imposed, approval of a final map does not require any further discretionary approval. Under such circumstances, there is no discretion to deny the final map or place additional conditions on its approval.

Mission Village. Mission Village is approved to include 4,055 homesites, including a mix of single-family detached homes, single-family attached homes, age qualified homes, apartments and for rent affordable units, and approximately 1.6 million square feet of commercial development. This development area is also expected to include approximately 25 acres of parks, with a variety of sports fields and playgrounds, two community recreation centers and 670 acres of open space, including natural habitat preserves. Mission Village will be connected to adjacent communities, as well as the Newhall High Country and the Santa Clara River regional trail systems, with six miles of trails and paseos. Mission Village will also include a fire station, a bus transfer station, a public library and an elementary school, which we will build.

Entrada South. Entrada South is planned to include 1,574 homesites, approximately 730,000 square feet of commercial development, approximately 153 acres of open space, 5 acres of parks and two community recreation centers with swimming pools, athletic courts and a community room. The homesites within this development area are designed for single-family detached homes, single-family attached homes and apartment homes. Entrada South will be connected to adjacent communities, as well as the Newhall High Country and the Santa Clara River regional trail systems, with six miles of trails and paseos. Entrada South will also include an elementary school, which we will build.

Remaining Development Areas. The remaining seven development areas are expected to include an aggregate of 15,871 homesites (including affordable units), approximately 9.2 million square feet of commercial development, approximately 9,177 acres of open space and approximately 245 acres of parks. These development areas are expected to include community-wide recreation centers, in addition to numerous neighborhood recreation centers, with swimming pools, athletic courts, fitness facilities, outdoor amphitheaters, water parks and community rooms. These development areas are expected to be connected to adjacent communities, as well as the Newhall High Country and the Santa Clara River regional trail systems, with 38 miles of trails and paseos. Legacy Village will include up to 1,455 age qualified homesites that, when combined with the up to 459 additional age qualified homesites in Mission Village, will become one of the largest new age qualified communities in Southern California. We also plan to build three fire stations, one

recycled water plant, three elementary schools, one junior high school and one high school within these development areas.

Mr. Haddad and Mr. McWilliams managed the predecessor of The San Francisco Venture from 1999 to 2005, and then transitioned management to Mr. Bonner (then an employee of Lennar) when Mr. McWilliams was appointed to lead Newhall Ranch. Lennar managed the development of The San Francisco Shipyard and Candlestick Point from 2005 until May 2016. As a result of the formation transactions, we now manage the development of The San Francisco Shipyard and Candlestick Point.

A disposition and development agreement covering Candlestick Point and the remaining development areas within The San Francisco Shipyard was entered into in 2010. Pursuant to a conveyance agreement between the U.S. Navy and the former San Francisco Redevelopment Agency, the U.S. Navy has an obligation to complete its finding of suitability to transfer process and obtain concurrence from USEPA and state environmental regulators that the property is suitable for the intended use prior to conveying parcels of land within The San Francisco Shipyard to the former San Francisco Redevelopment Agency. The finding of suitability to transfer process replaces many local approval requirements. For additional information about the finding of suitability to transfer process, see “Business and Properties—Regulation—FOST Process.” The initial land transfer of approximately 75 acres within The San Francisco Shipyard took place in 2005. With respect to Candlestick Point, the San Francisco Venture took title to approximately 70 acres in December 2014. The balance of both properties is expected to be conveyed to us in accordance with the disposition and development agreements over the next several years, although it is possible that delays relating to environmental investigation and remediation could slow the transfers.

We also plan for The San Francisco Shipyard and Candlestick Point to have approximately 355 acres of new public parks, sports fields and other green space. These areas will cover nearly half the site’s acreage and represent San Francisco’s largest park development since Golden Gate Park. One of the highlights is the San Francisco Bay Trail/Blue Greenway, which will provide a continuous recreational multi-use trail along the community’s waterfront, filling a gap in the regional network planned to eventually encircle the entire San Francisco Bay. Similarly, kayak, ferry service and windsurf launch points will enhance access to the regionally planned Bay Area Water Trail. For commuters and neighborhood cyclists, a secondary network of off-street multi-use trails will link parks and neighborhoods with the on-street bicycle network. Once completed, all parks will be dedicated to the City of San Francisco and publicly maintained with the proceeds from a special tax assessment.

The San Francisco Shipyard and Candlestick Point is intended to be a master-planned community that is vital, accessible and integrated into the San Francisco Bay Area. Our sustainability strategy for this community includes measures to minimize the impact of development on local infrastructure, resources and the environment, and measures to preserve the unique culture and diversity that defines the area. These measures include promoting walking and cycling as the primary modes of transportation within the community, implementing a whole-systems approach to energy conservation efficiency and protecting and enhancing parks, natural habitat, soils, water, air and climate.

The San Francisco Shipyard and Candlestick Point also includes a robust community benefits plan to ensure that the social goals and objectives of the community are delivered to the surrounding neighborhood and the City of San Francisco. The community benefits plan includes an extensive jobs training program as well as a community builder program that allows local community builders to participate in the development of certain portions of our community. These programs enhance the surrounding area’s participation so that local residents and business feel that they are part of the development of our community and sharing in its financial success. The San Francisco Shipyard and Candlestick Point also features the construction of a new artist studio building, expected to be one of the largest artist colonies in the United States, accommodating over 250 working artists who previously worked at existing facilities on the site. The artists enhance the cultural diversity of the community and create a regional draw as people travel from around the region to see the artwork on display at art exhibits at the site. We have also committed to subsidizing the redevelopment of the Griffith Project, an existing low income housing site which is being rebuilt and enlarged by a third party developer. For additional information about our obligations in connection with the redevelopment of the Griffith Project, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Other Contractual Obligations.”

In 2011, the Brookings Institution named The San Francisco Shipyard and Candlestick Point project as one of three transformative investments in the United States. Also, in 2011, the project was awarded the Gold Nugget award at the Pacific Coast Builders Conference for the best “on the boards” site plan, an award honoring site design.

In November 2014, the San Francisco Venture entered into a joint venture agreement with Macerich to construct an approximately 550,000 square foot urban retail outlet shopping district at Candlestick Point. As part of the formation transactions, the Lennar-CL Venture, in which Lennar is the majority investor, acquired the entity that owns an interest in the mall venture, but we have the right to acquire that entity when the mall is completed. This shopping district will be one of the most significant retail developments in San Francisco in recent years and will anchor the Candlestick Point community. This unique urban outlet concept is anticipated to include a large collection of diverse retail tenants catering to residents in the region as well as tourists. In addition to the shopping district being developed in partnership with Macerich, the surrounding area is planned to include housing, neighborhood retail stores, restaurants, a film and arts center building and a hotel that will serve the local community and serve as a draw for Bay Area residents and tourists. Construction of the urban retail shopping district of Candlestick Point commenced at the site in 2015 with the demolition of the stadium and other infrastructure work. Vertical construction is expected to commence in 2019 and the retail district is expected to open to customers in 2021.

The San Francisco Venture built the initial homes at The San Francisco Shipyard and Candlestick Point. As of May 2, 2016, the San Francisco Venture had sold 107 homes (including 9 affordable homes) and entered into contracts to sell 73 additional homes (including 11 affordable homes) for total aggregate consideration of approximately $117.4 million. On May 2, 2016, the San Francisco Venture transferred to the Lennar-CL Venture a property known as the Phase 1 Land, as well as all responsibility for current and future residential construction on the Phase 1 Land. See “Certain Relationships and Related Party Transactions—San Francisco Venture Transactions.” We are not entitled to any of the proceeds from future sales of homes on the Phase 1 Land (although we will receive a marketing fee for each home sold). For additional information about the land that was transferred to the Lennar-CL Venture and the land that was retained by the San Francisco Venture, see “—Development Status” below.

We have entered into an agreement with the Lennar-CL Venture pursuant to which the Lennar-CL Venture has agreed to transfer to us entitlements for the right to construct at least 172 homesites and at least 70,000 square feet of retail space for use in the development of other portions of The San Francisco Shipyard and Candlestick Point. See “Certain Relationships and Related Party Transactions—Entitlement Transfer Agreement.”

In November 2016, San Francisco voters approved an initiative measure, Proposition O, to exempt The San Francisco Shipyard and Candlestick Point from citywide office development growth restrictions. Those growth controls (referred to as Proposition M after the 1986 initiative measure first imposing them) limit the amount of new office construction each year in San Francisco to 950,000 square feet per year, and require each new office development of 25,000 square feet or more to obtain an allocation of office space from the Planning Commission. With passage of Proposition O, along with implementing redevelopment plan amendments the San Francisco Venture is seeking approval for in 2017, development at The San Francisco Shipyard and Candlestick Point will not be required to obtain an allocation of office space and will not be subject to the Proposition M annual limitations on office development. This means the full amount of permitted commercial square footage at The San Francisco Shipyard and Candlestick Point could be constructed as we determine, including all at once, even though Proposition M may delay new office developments elsewhere in San Francisco. We expect this will provide us with a competitive advantage in the marketing and sale of land at The San Francisco Shipyard, particularly to potential large-scale institutional or campus-type users who seek a large volume of predictably timed new office space.

The San Francisco Shipyard and Candlestick Point is located almost equidistant between downtown San Francisco and the San Francisco International Airport (SFO), with easy access to Silicon Valley. The community will feature walking and biking trails providing regional linkage to the San Francisco Bay Trail/San Francisco Blue Greenway. Regional connections will also be provided via transit with a new bus rapid transit system that will connect to CalTrain, Bay Area Rapid Transit (BART) and MUNI light rail as well as other bus connections and anticipated ferry service.

The Bay Area Counties are a highly supply constrained metropolitan area that displays many favorable housing and demographic trends including strong job growth, rising median incomes and low levels of housing inventory. Housing fundamentals have shown substantial improvements in recent years, which JBREC expects to contribute to future price appreciation. Payroll employment reached 1,220,300 as of December 2016, a 2.0% increase over the prior year, and median household income grew 2.2% to $98,820 in 2016. Between 2011 and 2016, San Francisco added approximately 239,700 jobs. During 2016, the Bay Area Counties added nearly 12,000 new residents, which JBREC expects to average approximately 15,000 residents per year through 2019.

year. New home prices in this environment of compressed new home sales volume can be heavily influenced by the mix of home types being sold at any given time. As a result, resale home prices are a better indication of housing market trends in the metropolitan area. As of December 2016, only 1,070 homes were listed on the market, which equates to only 0.9 months of supply (well below the typical equilibrium of 6.0 months). In the fourth quarter of 2016, commercial office space vacancy decreased to 9.4%, from 15.5% in 2010, and commercial asking rents per square foot increased to $58.28, from $36.34 in 2010.

Some of the largest employers in San Francisco and Silicon Valley include Wells Fargo & Company, The Gap, Inc., salesforce.com, inc., Visa Inc., Oracle Corporation, Genentech, Inc., Google Inc., Apple Inc. and Facebook, Inc.

The San Francisco Shipyard and Candlestick Point will generate approximately 5,600 temporary construction jobs during the development of the community. In addition, a significant number of jobs will be created spanning a broad range of industries and occupations, from entry-level jobs to executive and management positions.

From May 23, 2013 to December 31, 2016, the San Francisco Venture incurred approximately $622 million of development costs (which consist of costs for land, land improvements, construction costs and capitalized real estate taxes and interest) related to The San Francisco Shipyard and Candlestick Point. Approximately $230 million of this amount relates to properties that have been sold or were transferred to the Lennar-CL Venture.

We budget our cash development costs on an annual basis. Our budget for calendar year 2017 allocates approximately $125 million of cash for the development of The San Francisco Shipyard and Candlestick Point. The budgeted amounts for such development are expected to be funded through a combination of available cash, cash flows from property sales, and reimbursements from public financing, including CFDs, tax increment financing or local, state and federal grants. Our budget for 2017 is subject to change by a material amount, due to, among other things, delays or accelerations in construction or regulatory approvals, including as a result of delays in the U.S. Navy’s finding of suitability to transfer process, changes in inflation rates and other increases (or decreases) in costs. We may also modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

The table below summarizes entitlement and development activity at The San Francisco Shipyard and Candlestick Point as of December 31, 2016. We may modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

A “general plan” is a county or city’s basic planning document that governs physical development and land uses within a county or city; in this case, the City and County of San Francisco.

“Zoning” generally refers to the division of an area into zones for purposes of regulating the number and types of buildings and their uses.

Hilltop. Hilltop is a development area within the Phase 1 Land. Most of the significant land development for Hilltop has been completed. This development area is expected to include 519 homes for sale and 224 homes for rent (including a total of approximately 73 affordable homes). All 88 of the homes in the first two blocks of homes within this development area were presold within seven months, at prices ranging from the mid $400,000’s to the mid $900,000’s. All of these homebuyers had moved into their homes by March 2016. An additional 159 homes began presales in April 2015, with 19 of those homes closed by May 2, 2016. The San Francisco Venture began construction on another 72 homes in June 2015 and 60 more homes in March 2016. In addition to the homesites shown in the table, Hilltop will also include approximately 250 homesites retained by the City and County of San Francisco for affordable housing.

Hillside. Hillside is a development area within the Phase 1 Land. A portion of the horizontal development for Hillside has been completed. This development area is expected to include 404 homes for sale (including approximately 54 affordable homes). In addition to the homesites shown in the table, this development area also includes approximately 90 homesites retained by the City and County of San Francisco for affordable housing.

Portions of Candlestick Point. The San Francisco Venture has contracted to sell to the Lennar-CL Venture a portion of Candlestick Point consisting of three development blocks plus homesites within future vertical mixed use projects a portion of which has already been sold. This development area is expected to include 713 homesites.

Remaining Development Areas. Under the disposition and development agreement, the remaining development areas within The San Francisco Shipyard and Candlestick Point are expected to include an aggregate of 9,787 homesites, of which approximately 1,140 are expected to be retained by the City and County

of San Francisco for construction of affordable housing, 504 homes are part of the Griffith Project, 809 are inclusionary affordable homes and 892 are workforce homes. The homesites within these remaining development areas are expected to be a mix of townhomes, condominiums and apartments. The condominiums and apartment homesites could be contained in a mix of low rise and mid-rise podium buildings as well as high rise towers. These development areas include an approximately 550,000 square foot urban outlet shopping district at Candlestick Point at the site of the former Candlestick Park stadium being developed in our partnership with Macerich. The demolition of the stadium is complete, horizontal improvements are in progress and vertical construction is expected to commence in 2019. The shopping district is planned to open in 2021. In addition to the shopping district being developed in partnership with Macerich, an additional 335,000 square feet of retail space and 3,150,000 square feet of office and research and development space are planned within The San Francisco Shipyard and Candlestick Point along with a hotel, a parking structure and artist studios. Tentative subdivision maps have been approved for Candlestick Point.

Remaining Development Areas Following Proposed Entitlement Shift and Addition of Commercial Square Footage to The San Francisco Shipyard. The San Francisco Venture currently anticipates shifting homesites of The San Francisco Shipyard to other phases of The San Francisco Shipyard or to Candlestick Point, to increase office and research and development square footage at The San Francisco Shipyard and to convert some office square footage at The San Francisco Shipyard to additional retail and other uses. Following this entitlement shift and increase in commercial development, the number of homesites in remaining development areas within The San Francisco Shipyard and Candlestick Point could increase up to approximately 9,959 and the total amount of commercial uses within The San Francisco Shipyard and Candlestick Point, including hotel, makers space, artists’ studios, community uses and schools, could increase up to approximately 6,675,500 square feet.

The entitlement shift and increase in commercial square feet described above require:

The San Francisco Venture expects to submit applications for these amendments to the disposition and development agreement and redevelopment plan for The San Francisco Shipyard in 2017.

Our land at The San Francisco Shipyard and Candlestick Point is not subject to any material liens or encumbrances.

Adjacent to the highly regarded master-planned Irvine Ranch communities, Great Park Neighborhoods is being developed on the former site of the El Toro Base, which was first commissioned by the U.S. Marine Corps in 1943 and operated until 1999, when it was decommissioned as an active base. In July 2005, the U.S. Navy auctioned the El Toro Base as four separate parcels of land and the Great Park Venture, under the direction of Mr. Haddad (then employed by Lennar), prevailed at the auction and purchased all four parcels. The U.S. Navy has an obligation to complete its finding of suitability to transfer process prior to conveying land to the Great Park Venture and all of the revenue producing portions of the Great Park Neighborhoods acreage have been delivered by the U.S. Navy to the Great Park Venture. In connection with the acquisition, the Great Park Venture also entered into a development agreement with the City of Irvine, which marked the end of fifty-six years of military history and the beginning of a unique partnership with the City of Irvine. In 2006, Ms. Jochim, our Executive Vice President, relocated from San Francisco, where she was handling land operations for Lennar, to lead the redevelopment of the El Toro Base, reporting to Mr. Haddad.

In 2013, the City of Irvine allowed a modification of the project zoning to allow an increase in the total number of homesites within Great Park Neighborhoods to 9,500. At the same time the rezoning was approved, the Great Park Venture entered into an agreement with the City of Irvine to construct 688 acres of the Orange County Great Park. This portion of the Orange County Great Park is expected to include an approximately 175 acre sports park planned for 18 soccer and multi-use fields, 25 tennis courts, four sports courts, 12 baseball/softball fields and five sand volleyball courts, a 40 acre bosque landscape area, a 36 acre canyon area, a 188 acre golf course, golf practice facility and clubhouse and a 178 acre wildlife corridor. Pursuant to the amended development agreement, the Great Park Venture has a vested right to develop 9,500 homesites and approximately 4.9 million square feet of commercial space within Great Park Neighborhoods, subject to the terms and requirements of the development agreement. The development agreement also provides that the Great Park Venture entitlements are protected through 2045 and that, subject to certain limitations, we may locate or relocate certain permitted uses to different development areas within the Great Park Neighborhoods as long as the combined maximum program is maintained. This provides flexibility for us to respond to changing market conditions. For additional information about our entitlements for Great Park Neighborhoods, see “—Development Status” below.

Throughout our planning and development of Great Park Neighborhoods, we have consistently demonstrated our commitment to promoting sustainability. We have transformed runways to greenways, integrated parks, trails and open space into our design and expect to preserve approximately 500 trees by relocating them throughout the community. We also expect to recycle the vast majority of construction material created by demolition. For example, many of the materials from the El Toro Base, including runway lights, warehouses, chimneys, bricks, pipes and metals, have been repurposed and incorporated into the design of both the Orange County Great Park and Great Park Neighborhoods.

The first homesites were sold in April 2013 and, as of December 31, 2016, the Great Park Venture had sold 3,866 homesites (including 544 affordable homesites) and commercial land allowing for development of up to 2 million square feet of commercial (research and development) space for aggregate consideration of approximately $1.68 billion. For additional information about the status of our development with Great Park Neighborhoods, see “—Development Status” below. In January 2015, Pavilion Park at Great Park Neighborhoods was named “Master Planned Community of the Year” in the United States by the National Association of Homebuilders. This award recognizes outstanding performance in residential real estate sales, marketing and design.

Great Park Neighborhoods is convenient to local and regional job centers. It is located approximately seven miles from the Pacific Ocean, approximately nine miles from the University of California, Irvine (UCI) and approximately 17 miles from Disneyland. Great Park Neighborhoods is also easily accessible by public and private transportation. It is adjacent to the Irvine Transportation Center, where residents, customers and

employees can access Metrolink, Amtrak and Orange County Transportation Authority bus routes, and close to Interstate 5, Interstate 405, State Route 133 and John Wayne Airport (SNA) in Orange County.

The City of Irvine is in the heart of Orange County, a supply constrained area with rapidly increasing new home prices, strong job growth, rising median income levels and low levels of resale housing inventory. With a vibrant economy and employment centers, Orange County is a “first choice” location for housing within the larger Southern California market. Like many coastal California areas, housing demand fundamentals have shown considerable improvement in recent years as a result of improving home sales activity and job growth. Between 2011 and 2016, Orange County added 214,600 jobs, representing growth of 12.6%, and JBREC expects an average annual job growth rate of 1.5% between 2017 and 2019. During 2016, Orange County added over 17,200 new residents, which JBREC expects to increase to approximately 19,100 residents per year through 2019. Great Park Neighborhoods is also estimated to bring a significant number of jobs to the region.

The City of Irvine’s top employers, including the University of California, Irvine, Irvine Unified School District, Blizzard Entertainment, Inc., Broadcom Corporation, Edwards Lifesciences Corporation, Parker-Hannifin Corporation, Nationstar Mortgage, Glidewell Laboratories, 24 Hour Fitness and Thales Avionics, span a wide range of industries, including education, technology, medical devices, aerospace, financial services and fitness. Residents and employers choose the City of Irvine for, among other reasons, its central location, its highly rated schools, and its safety. From 2004 to 2014, the City of Irvine was ranked as having the Lowest Violent Crime Rate in America based on FBI statistics for cities with over 100,000 residents.

From July 12, 2005 to December 31, 2016, the Great Park Venture incurred approximately $2.18 billion of development costs (which consist of costs for land, land improvements and capitalized real estate taxes and interest) related to Great Park Neighborhoods. Approximately $1.07 billion of this amount relates to properties that have been sold. The remaining amount ($1.11 billion) and any additional amounts incurred will be allocated, based on relative sales value, to individual parcels within Great Park Neighborhoods as homesites are sold.

The Great Park Venture budgets cash development costs on an annual basis. The budget for calendar year 2017 allocates approximately $550 million for the development of Great Park Neighborhoods. These budgeted amounts are expected to be funded through a combination of available cash, cash flows from property sales and reimbursements from public financing, including CFDs or local, state and federal grants. The budget for 2017 is subject to change by a material amount, due to, among other things, delays or accelerations in construction or regulatory approvals, changes in inflation rates and other increases (or decreases) in costs. The Great Park Venture may also modify development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

The table below summarizes entitlement and development activity at Great Park Neighborhoods as of December 31, 2016. We may modify our development plans or change the sequencing of our communities in response to changing economic conditions, consumer preferences and other factors, which could have a material impact on the timing and amount of our development costs.

A “general plan” is a county or city’s basic planning document that governs physical development and land uses within a county or city; in this case, the City of Irvine.

“Zoning” generally refers to the division of an area into zones for purposes of regulating the number and types of buildings and their uses.

“VTTM” is a vesting tentative tract map that approves the division of property into separate legal lots for sale or lease (subject to the satisfaction of specified conditions of approval) and, upon approval, confers a vested right to proceed with the subdivision development in accordance with the ordinances, policies and standards in effect at the time the application for the vesting tentative tract map was deemed complete.

“Final maps” regulate and control the design and improvements within subdivisions, and must substantially conform to previously approved vesting tentative tract maps. If the final map substantially conforms to the previously approved vesting tentative tract map and the conditions imposed, approval of a final map does not require any further discretionary approval. Under such circumstances, there is no discretion to deny the final map or place additional conditions on its approval.

Pavilion Park. In May 2013, the Great Park Venture completed development of Pavilion Park, which includes 947 homesites, an approximately six acre park and a community center with a swimming pool, a greenhouse and a playground. In May 2013, the Great Park Venture sold 726 of the homesites in this development area to eight homebuilders for aggregate consideration of $337.7 million. An additional $19.1 million was received in connection with participation payments from builders. The grand opening event for home sales at Pavilion Park occurred in September 2013 and the 726 single-family detached homes, with sizes ranging from 1,878 square feet to 4,240 square feet, were approximately 98% sold out in March 2015, with prices ranging from $772,000 to $2,200,000. Pavilion Park will also include 221 affordable units that are being developed by a third-party partnership. The grand opening event for these affordable units occurred in November 2015.

Beacon Park. Beacon Park includes 1,029 homesites designed for single-family detached homes and single-family attached homes, with sizes ranging from approximately 1,450 square feet to approximately 4,700 square feet, as well as an approximately six acre park and a community center with a swimming pool. The Great Park Venture sold 921 homesites in December 2014 and the remaining 108 homesites in the second quarter of 2015. The homesites were sold to ten homebuilders for aggregate base consideration of $510.9 million, with the potential to receive from each homebuilder additional payments in the event that such homebuilder’s overall profitability of the homes built exceeds an agreed-upon margin. The grand opening for home sales at Beacon Park occurred in August 2015. Beacon Park will also include a new K-8 school, which the Irvine Unified School District broke ground on in April 2015 and was completed and opened in August 2016.

Broadcom Commercial. In March 2015, the Great Park Venture sold Great Park Neighborhoods’ first parcels of commercial land to a subsidiary of Broadcom Corporation, one of Irvine’s largest employers. Broadcom Corporation’s subsidiary purchased approximately 73 net acres of commercial land and has broken ground on a research and development campus, which is planned for up to two million square feet of research and development and corresponding office space. Subsequent to the acquisition of the site, Broadcom Corporation announced that it entered into a merger agreement with Avago Technologies, which merger was completed in February 2016. The successor entity (now called Broadcom Limited) recently announced that it intends to sell all or a portion of the land it acquired, including the buildings currently under construction (approximately one million aggregate square feet) and all other improvements on the land and the entitlements for the remaining approximately one million square feet of space not yet under construction.

The agreement under which the Great Park Venture sold this land to Broadcom Limited provides the Great Park Venture with a right (which is assignable) to repurchase the land and any improvements on and entitlements appurtenant to the land before it is sold to a third party on the terms provided in the purchase agreement. The Great Park Venture is currently evaluating whether it intends to exercise this repurchase option. If the option is exercised, the aggregate purchase price payable for the land, improvements and entitlements would be approximately $443 million, subject to customary prorations and adjustments. As part of the transaction, two of the buildings (approximately 640,000 aggregate square feet) would be leased back to Broadcom Limited. The financing for any such purchase has not yet been determined but would likely include a combination of project-level debt financing and equity from existing and potentially new investors. We are not obligated to participate in any such purchase but expect that we would provide a portion of the equity investment. Although we own a 37.5% percentage interest in the Great Park Venture, if the property is acquired, our interest in the property could be a greater or lesser percentage. The closing of any such purchase would be subject to certain closing conditions and could occur in the second or third quarter of 2017. There can be no assurance that the Great Park Venture will complete the purchase at all or on terms that are attractive to it and its equity holders.

Parasol Park. Parasol Park includes 727 homesites for detached and attached condominiums, with home sizes ranging from approximately 1,400 square feet to approximately 3,200 square feet. The Great Park Venture sold the 727 homesites to six homebuilders in 2016 for aggregate consideration of $228 million. Surrounded by homes with architecture that has a more urban feel, Parasol Park’s neighborhood park provides plenty of space for get-togethers and gatherings including a playground, an outdoor kitchen, open space, and shade under the iconic Stone Pine. The grand opening for home sales at Parasol Park occurred in January 2017.

Development Area 7. On October 6, 2015, the Great Park Venture completed the sale of Development Area 7, which includes 840 homesites, to a joint venture, in which Lennar owns a 50% interest, for $480 million (less an $8 million credit), of which $160 million was paid (or credited) at the closing and the remainder was collected on December 5, 2016. In addition, the Great Park Venture collected approximately $18 million in interest and fees under a promissory note from an entity in which Lennar has an interest that was paid in December 2016).

Development Area 1 West Affordable Homesites. A total of 323 affordable housing homesites in Development Area 1 West have been conveyed by the Great Park Venture. On April 29, 2016, 82 family affordable homesites were sold. On June 6, 2016, 84 family affordable homesites were sold. On August 26, 2016, 157 senior affordable homesites were sold. All of the foregoing homesties are currently under construction.

Development Areas 1 South, 1 West, 2, 3, 4 Residential, 4 Commercial, 5 and 6. These development areas are expected to include an aggregate of approximately 5,634 homesites (including approximately 512 affordable units) and 2.9 million square feet of commercial space. Development Area 5 includes Portola High School, which approximately 2,600 students are expected to attend. The Irvine Unified School District began construction of Portola High School in the fall of 2014, and it opened in August 2016. These development areas may also include one or more K-8 schools.

The land at Great Park Neighborhoods is not subject to any material liens or encumbrances.

We own approximately 16,000 acres in Ventura County that are primarily used for agriculture and energy operations, as well as The Tournament Players Club at Valencia Golf Course, a private golf club located on 212 acres in Los Angeles County which is operated by a third-party. We also own approximately 500 acres of remnant commercial, residential and open space land in Los Angeles County that is planned to be sold or deeded to third parties over the next five years. In addition, as of December 31, 2016, we had 153 homesites, on approximately 24 acres, remaining to be sold within a residential community in Sacramento, California.

We provide development management services for each of our communities. We do not receive any fees for any development management services provided for Newhall Ranch, which is wholly owned by the operating company. However, we do receive fees for providing development management services for Great Park Neighborhoods and for providing certain (but not all) development management services for The San Francisco Shipyard and Candlestick Point, each of which has third party investors. In addition, we receive fees for providing development management services with respect to the Treasure Island and Concord communities, which are owned by ventures in which Lennar is an investor.

For The San Francisco Shipyard and Candlestick Point, we have entered into (1) a development management agreement with affiliates of the Lennar-CL Venture to provide development management services

for a parking structure, the film and arts center building and the approximately 334 multi-family homesites at Candlestick Point (the “Candlestick DMA”) and (2) a development management agreement with affiliates of the Lennar-CL Venture to provide development management services for the infrastructure, horizontal development and portions of the preliminary vertical design of the Phase 1 Land (the “Phase 1 DMA”). Under the Candlestick DMA, we are not entitled to receive any fee, but we are entitled to reimbursement for any development costs incurred. Under the Phase 1 DMA, we are entitled to receive an aggregate fee of $1,500,000, payable in monthly installments of $50,000, and reimbursement for any development costs incurred.

For Great Park Neighborhoods, we entered into an amended and restated development management agreement in connection with the formation transactions. Under the amended and restated development management agreement for the Great Park Venture, FP Inc., as the nominee for FP LP, oversees and directs all aspects of the management, operation, development and sale of properties at Great Park Neighborhoods in exchange for an initial monthly fee of $500,000, subject to adjustment for inflation. FP Inc. is also entitled to incentive compensation payments equal to (1) $43,101,255, plus (2) 9% of any distributions made by GPV Subsidiary, after certain returns of capital and other payments. The operating company, as the direct or indirect holder of all outstanding Class A partnership interests in FP LP, is entitled to receive all distributions paid by FP LP, except that holders of Class B partnership interests in FP LP are entitled to receive the initial distribution of $43,101,255, which was paid in January 2017, and any incentive compensation attributable to payments under a cash flow participation agreement acquired by the Great Park Venture prior to the closing of the formation transactions.

We have entered into an agreement pursuant to which we will provide development management services with respect to the Treasure Island community, which is owned by a joint venture in which Lennar owns a 50% interest and is responsible for development management. Treasure Island is an approximately 405 acre mixed-use, master-planned community on Treasure Island and parts of Yerba Buena Island in the San Francisco Bay between San Francisco and Oakland. The Treasure Island community is being developed on the former site of the Treasure Island Navy Base and is currently designed to include approximately 8,000 homesites, approximately 450,000 square feet of commercial space, approximately 500 hotel rooms, approximately 300 acres of parks and public open space, a joint police/fire station, a school and other community facilities. Pursuant to the agreement for the Treasure Island community, we will be entitled to a fixed annual management fee of $3,600,000 and reimbursement for any development costs incurred.

We have entered into an agreement pursuant to which we will provide development management services with respect to the Concord community, which is an acquisition and development opportunity of an affiliate of Lennar. Concord is an approximately 500 acre mixed-use, master-planned community on the Concord Naval Weapons Station in Concord, the San Francisco Bay Area’s eighth-largest city. The Concord community is currently designed to include approximately 4,400 homesites, nearly 1.7 million square feet of commercial space, a school, two community centers and more than 100 acres of parks, open space and greenways. Infrastructure development is expected to begin sometime in 2019. Pursuant to the agreement for the Concord community, we are currently entitled to a fixed annual management fee of approximately $935,000, plus a variable monthly amount to reimburse us in full for development costs incurred by us for the Concord community, and the actual out-of-pocket salaries, bonuses, benefits, employment taxes and other costs associated with the personnel hired by us and dedicated to performing services under the development management agreement.

We compete with other residential, retail and commercial property developers in the development of properties in the Northern and Southern California markets. Significant factors which we believe allow us to compete effectively in this business include:

Land use and zoning authority is exercised by local municipalities through the adoption of ordinances, regulations or zoning codes to direct the use and development of private property by controlling the use, size, density and location of and access to developments on private land. Such ordinances, regulations or codes typically divide uses of land into two categories, permitted uses and discretionary uses. Permitted uses are presumptively permitted, while discretionary uses are subject to a discretionary approval process, usually involving an application, an environmental review and a public hearing with input from other locally affected property owners and stake holders. In order to grant a discretionary use entitlement, the municipality must find that the use does not negatively impact surrounding properties and may condition such an entitlement with special requirements or limitations unique to each individual case. We typically obtain all discretionary entitlements and approvals necessary to develop the infrastructure within our communities and prepare our residential and commercial lots for construction. We also typically obtain all discretionary entitlements and approvals that the homebuilder or commercial builder will need to build homes or commercial buildings on our lots, although we may from time to time allocate responsibility for obtaining certain discretionary entitlements to a homebuilder or commercial builder.

We have incurred significant costs and expenses over the last 10 to 15 years in order to obtain the primary entitlements (general plan and zoning approvals) for our communities. Once these primary entitlements are obtained, we continue to refine the master plan for each community by planning specific development areas and obtaining the necessary governmental approvals for a development area. Among other things, we typically need to obtain the following approvals for each development area: (1) approval of the subdivision maps (such as vesting tentative tract maps and parcels maps) that allow the land to be divided into separate legal lots for residential, commercial and other improvements; (2) approval of the improvement plans that set forth certain design, engineering and other elements of infrastructure, parks, homes, commercial buildings and other improvements; (3) approval of the final map that allows for the conveyance of individual homesites and commercial lots; and (4) any other discretionary approvals needed to construct, finance, sell, lease or maintain the homes or commercial buildings within a development area.

We may also need to obtain state and federal permits for land development activities in certain development areas, including, for example, permits and approvals issued by state and federal resource agencies authorizing impacts to species covered by endangered species acts or impacts to state and federal waters or wetlands.

Development areas within our communities are at various stages of planning and development and, therefore, have received different levels of discretionary entitlements and approvals. In some cases, development areas have obtained entitlements and approvals allowing homes and commercial buildings to be built and sold, and in other cases development areas require further discretionary entitlements or approvals prior to the

commencement of construction. In still other cases, our approvals have been challenged by third parties. For additional information on current legal challenges, see “—Legal Proceedings.” For additional information about the status of each development area within our communities, see “—Our Communities—Development Status.”

Under various federal, state and local laws and regulations relating to the environment, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or discharge of hazardous or toxic substances, waste or petroleum products at, on, in, under or migrating from such property, including costs to investigate and clean up such contamination and liability for damage to natural resources. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such contamination, and the liability may be joint and several. These liabilities could be substantial and the cost of any required remediation, removal, fines or other costs could exceed the value of the property or our aggregate assets. In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party liability for costs of remediation or personal or property damage or materially adversely affect our ability to sell, lease or develop our properties or to borrow using the properties as collateral. In addition, environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Such remaining contamination encountered during our construction and development activities also may require investigation or remediation, and we could incur costs or experience construction delays as a result of such discoveries.

Some of our properties were used in the past for commercial or industrial purposes, or are currently used for commercial purposes, that involve or involved the use of petroleum products or other hazardous or toxic substances, or are adjacent to or near properties that have been or are used for similar commercial or industrial purposes. As a result, some of our properties have been or may be impacted by contamination arising from the releases of such substances. For example, oil and gas wells have formerly operated or are currently operating at Newhall Ranch. In certain cases, prior owners or operators have in the past investigated or remediated, or are currently investigating or remediating, such conditions, but contamination may continue to be present at these sites, and future remedial activities could delay or otherwise impede property development on sites where contamination is present.

In addition, The San Francisco Shipyard and Great Park Neighborhoods properties were formerly operated by the U.S. Navy as defense plants. As a result of these historic operations, portions of these properties have been or currently are listed on the USEPA’s National Priorities List as sites requiring cleanup under federal environmental laws. While investigation and cleanup activities have been substantially completed for Great Park Neighborhoods, significant future work is contemplated over the next few years for certain parcels within The San Francisco Shipyard, and such work could delay or impede future transfer of such parcels for development.

The National Environmental Policy Act (“NEPA”) requires federal agencies to integrate environmental values into their decision making processes by considering the environmental impacts of their proposed actions and reasonable alternatives to those actions. To meet NEPA requirements federal agencies prepare a detailed statement known as an Environmental Impact Statement (“EIS”). Additionally, all Department of Defense installations (such as The San Francisco Shipyard and former El Toro Marine Corps Air Base) selected for closure or realignment pursuant to the Base Closure and Realignment Acts of 1988 or 1990 and being considered for transfer by deed, and where a release or disposal of hazardous substances or petroleum products has occurred, are subject to an environmental review process and may not be transferred until a finding of suitability for transfer (“FOST”) is documented. In addition, our development projects are subject to CEQA, which is similar in scope to NEPA, and requires potential environmental impacts of projects subject to discretionary governmental approval to be studied by the California governmental entity approving the proposed projects. Projects with

significant expected impacts require an EIR while more limited projects may be approved based on a Mitigated Negative Declaration. All of our development sites and projects have either been or continue to be investigated, remediated or reviewed (with documented EISs, FOSTs and EIRs, as applicable) in accordance with the above-described and other applicable environmental laws to determine the suitability of their proposed uses and to protect human health and the environment.

New or additional permitting requirements, new interpretations of requirements, changes in our operations or litigation or community objections over the adequacy of conducted reviews and other response and mitigation actions could also trigger the need for either amended or new reviews or actions, which could result in increased costs or delays of, modification of, or denial of rights to conduct, our development programs. For additional information about the status of each development area within our communities, see “—Our Communities—Development Status.” For additional information on current legal challenges to our Newhall Ranch development under environmental laws, see “—Legal Proceedings.”

When we identify conditions that require a response under environmental laws, we endeavor to address identified contamination or mitigate risks associated with such contamination as required (or ensure that such actions are taken by other parties, such as prior owners and operators); however, we cannot assure you that we will not need to take additional action, incur additional costs, or delay or modify our development plans to address these conditions or other environmental conditions that may be discovered in the future. As a result of the foregoing, we could potentially incur material liabilities.

We are also subject to a variety of other local, state, federal and other laws and regulations concerning the environment, including those governing air emissions, wastewater discharges and use and disposal of hazardous or toxic substances. The particular environmental laws that apply to any given property vary according to multiple factors, including the property’s location, its environmental conditions and the present and former uses of the property, as well as adjoining properties. These issues may result in delays, may cause us to incur substantial compliance and other costs, and can prohibit or severely restrict development activity in environmentally sensitive regions or areas. For example, in those cases where wetlands or an endangered or threatened species are impacted by proposed development, environmental rules and regulations can result in the restriction or elimination of development in such identified environmentally sensitive areas.

Environmental laws also govern the presence, maintenance and removal of asbestos-containing materials, or ACM, and may impose fines and penalties for failure to comply with these requirements or expose us to third-party liability (such as liability for personal injury associated with exposure to asbestos). Such laws require that owners or operators of buildings containing ACM (and employers in such buildings) properly manage and maintain the asbestos, adequately notify or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building. In addition, soils at The San Francisco Shipyard and Candlestick Point are known to contain naturally occurring asbestos, which must be managed, including through dust management plans. In the past, we have been subject to penalties for failure to monitor asbestos dust during development activities at The San Francisco Shipyard, and, although we endeavor to maintain (and to cause our contractors to maintain) compliance, we could incur such fines or penalties in the future.

The U.S. Navy is implementing its cleanup program at The San Francisco Shipyard pursuant to various federal laws and authorities. The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) requires the U.S. Navy to remediate The San Francisco Shipyard in accordance with a federal facilities agreement entered into with the U.S. Environmental Protection Agency and the State of California, which sets forth procedures and timeframes for remedial decisions and deliverables. In accordance with the federal facilities agreement, the National Contingency Plan, 40 C.F.R. Part 300 and Department of Defense procedures, the U.S. Navy’s cleanup process involves (1) preparation of a series of reports documenting various

investigative and remedial activities and (2) securing approval of those reports from the U.S. Environmental Protection Agency and the State of California. The remedial steps and related reports, each of which is subject to review, comment and approval, are as follows:

At The San Francisco Shipyard, approximately 408 acres will not be conveyed until the U.S. Navy satisfactorily completes its finding of suitability to transfer process, which involves multiple levels of environmental and governmental investigation, analysis, review, comment and approval. Based on our discussions with the U.S. Navy and a final federal facility agreement schedule for 2017 prepared by the U.S. Navy, we expect the U.S. Navy to deliver approximately 94 acres in 2018, 138 acres in 2019, 47 acres in 2020 and 129 acres in 2022. With respect to the properties scheduled for transfer in 2018, the remedial action workplans are complete and the U.S. Navy is in the process of final implementation of the remedial actions.

It is possible that the FOST process could delay or impede the scheduled transfer of these parcels, which would in turn delay or impede our future development of such parcels.

In December 2010, the California Department of Fish and Wildlife (“CDFW”) issued a Master Streambed Alteration Agreement (“MSAA”) and two Incidental Take Permits (“ITPs”) for endangered species, and certified the final Environmental Impact Report (“EIR”) portion of the Newhall Ranch Environmental Impact Statement/EIR (“EIS/EIR”). The EIS/EIR was a document jointly prepared by CDFW and the U.S. Army Corps of Engineers (the “Corps”). The Corps prepared and approved the EIS portion of the joint document under the National Environmental Policy Act (“NEPA”). CDFW prepared and certified the EIR portion of the EIS/EIR under the California Environmental Quality Act (“CEQA”). In January 2011, five petitioners filed a complaint in Los Angeles County Superior Court (the “Superior Court”) challenging the issuance of the MSAA and ITPs and certification of CDFW’s Final EIR under CEQA, the California Endangered Species Act (“CESA”) and the Fish and Game Code. After a trial court ruling and an appeal, the Second District Court of Appeal (“Court of Appeal”) ultimately upheld CDFW’s certification of the EIR and issuance of the MSAA and ITPs. Thereafter, the California Supreme Court (the “Supreme Court”) granted review on three issues and after issuing an opinion, remanded the case to the Court of Appeal.

In a decision filed in November 2015, the Supreme Court reversed the judgment of the Court of Appeal on the three issues. Procedurally, the Supreme Court’s decision became final in February 2016, after that court denied the petitioners’ and our respective petitions for rehearing. The three issues addressed by the Supreme Court were: (i) the EIR’s greenhouse gas (“GHG”) emissions significance findings, (ii) the EIR’s mitigation measures for a protected fish species (“Stickleback”) and (iii) the timeliness of comments on impacts to cultural resources and steelhead smolt (another fish species). With respect to the GHG issue, the Supreme Court approved the EIR’s methodology analyzing the significance of the project’s GHG emissions in terms of reductions from projected “business as usual” emissions consistent with the statewide reduction mandate in California’s Global Warming Solution Act of 2006 (“AB 32”) and the baseline methodology used in the EIR’s GHG analysis. However, the Supreme Court held that the GHG analysis lacked substantial evidence and explanation of the project’s no significant GHG findings. For that reason, the Supreme Court directed that the GHG emissions findings be corrected. On the second issue, the Supreme Court held the EIR mitigation measures for Stickleback violated the Fish and Game Code section 5515 prohibition on the “take” of fully-protected fish. On the third issue, the Supreme Court held that certain comments on cultural resources and steelhead smolt were timely submitted and remanded these issues to the Court of Appeal to reexamine the merits of the cultural resources and steelhead issues and issue a new decision on whether substantial evidence supported CDFW’s determinations on these issues.

As to the first two issues above, the Supreme Court decision requires CDFW to reevaluate its project approvals (as they relate to these specific issues) in accordance with the Supreme Court’s holding and to complete an additional environmental analysis, public review and certification under CEQA. On November 3, 2016, CDFW released for public review the draft additional environmental analysis in response to the Supreme Court’s decision. We will continue to work and consult with CDFW to review and analyze any comments received during this public review period, and to complete the regulatory process and certification of the additional analysis under CEQA.

As to the third issue, in July 2016, after the remand, the Court of Appeal reexamined the merits of the petitioners’ cultural resources and steelhead issues and ruled in favor of CDFW and us by finding substantial evidence to support CDFW’s decisions as to these issues. Further, the Court of Appeal denied a petition for rehearing, and after a petition for review was filed, the Supreme Court denied review. In November 2016, the Court of Appeal issued a remittitur, which means the case is complete and the trial court now has jurisdiction to issue post-decision orders, consistent with the Supreme Court’s and the Court of Appeal’s decisions.

In December 2016, after briefing and a hearing, the trial court signed the judgment proposed by CDFW, and the trial court issued the writ of mandate as to the GHG and stickleback issues. In February 2017, petitioners

filed a notice of appeal of the trial court’s judgment. Thereafter, a notice of related appeal was filed and the matter is now pending in the Second Appellate District (Los Angeles).

CDFW released for public review the draft additional environmental analysis and the corresponding development plan in response to the two remaining issues raised by the Supreme Court and the public review period concluded in February 2017. The additional analysis contemplates specific mitigation measures and project design features that (1) reduce, mitigate and offset 100 percent of the net GHG emissions from the Newhall Ranch project and (2) avoid harm or other significant adverse effects to Stickleback. While the Supreme Court’s ruling may result in us having to pay certain attorneys’ fees or costs, the development plan for the Newhall Ranch project described in the additional environmental analysis released by CDFW does not contemplate a reduction in the number of homesites or amount of commercial square feet we desire to develop.

The Los Angeles County Board of Supervisors (the “BOS”) certified the final EIR and adopted project approvals for Newhall Ranch’s Landmark Village development area in October 2011, and approved the vesting tentative map, general, specific and local plan amendments and various project permits and other authorizations in February 2012. In March 2012, five petitioners filed a petition in the Superior Court challenging the approvals and certification of the EIR on the alleged grounds that Los Angeles County (the “County”) violated CEQA, the Subdivision Map Act and state planning and zoning laws. In January 2014, the Superior Court issued a favorable Statement of Decision, which denied petitioners’ request and upheld the BOS approvals and in April 2015, the Court of Appeal reaffirmed the Superior Court’s decision in full. In August 2015, the Supreme Court granted the petitioners’ request to review the GHG issue, but ordered that the action be deferred pending disposition of the related GHG issue in the California Department of Fish and Wildlife action noted above.

In March 2016, the Supreme Court transferred the case to the Court of Appeal, and in November 2016, the Court of Appeal issued a new decision reversing the trial court judgment to the sole extent that the EIR did not support its no significant GHG impact finding with substantial evidence. The Court of Appeal also held that the petitioners’ amended petition and complaint is to be denied in all other respects. In January 2017, the Court of Appeal issued its remittitur, which means the case is complete and the trial court now has jurisdiction to issue post-decision orders, consistent with the Supreme Court’s GHG holding and the Court of Appeal’s decision. In March 2017, after briefing and a hearing, the trial court signed the judgment proposed by CDFW and the trial court issued the writ of mandate as to the GHG issue.

The County released for public review the draft additional environmental analysis for the Landmark Village EIR in response to the Supreme Court’s GHG holding and the public review period concluded in February 2017. We will work and consult with the County to review and analyze all comments received during the public review period and to complete the regulatory process and certification of the additional analysis under CEQA. The Landmark Village development plan and additional analysis contemplate specific mitigation measures and project design features intended to reduce, mitigate and offset 100 percent of the net GHG emissions from the Landmark Village project. While the Supreme Court’s GHG holding may result in us having to pay certain attorneys’ fees or costs, the development plan for the Landmark Village project described in the additional environmental analysis released by the County does not contemplate a reduction in the number of homesites or amount of commercial square feet we desire to develop.

In October 2011, the BOS certified the final EIR and provisionally approved Newhall Ranch’s Mission Village development area subject to review of the project’s approval documents, findings, overriding considerations, and mitigation monitoring. In May 2012, the BOS adopted the project approval documents, including the vesting tentative map, permits and other authorizations. In June 2012, five petitioners filed a petition in the Superior Court challenging the approvals and certification of the EIR on the alleged grounds that

the County violated CEQA, the Subdivision Map Act and state planning and zoning laws. In June 2014, the Superior Court issued a favorable Statement of Decision, which denied the petitioners request and upheld the BOS approvals, and in September 2015, the Court of Appeal affirmed the Superior Court’s decision in full. In December 2015, the Supreme Court granted the petitioners’ request to review the GHG issue, but ordered that the action be deferred pending disposition of the related GHG issue in the California Department of Fish and Wildlife action noted above.

In March 2016, the Supreme Court transferred the case to the Court of Appeal, and on December 1, 2016 the Court of Appeal issued a new decision reversing the trial court judgment to the sole extent that the EIR did not support its no significant impact greenhouse gas finding with substantial evidence and a reasoned discussion. The Court of Appeal affirmed the trial court judgment in all other respects. In February 2017, the Court of Appeal issued its remittitur, which means the case is complete and the trial court now has jurisdiction to issue post-decision orders, consistent with the Supreme Court’s GHG holding and the Court of Appeal’s decision. In March 2017, after briefing and a hearing, the trial court signed the judgment proposed by CDFW and the trial court issued the writ of mandate as to the GHG issue.

The County released for public review the draft additional environmental analysis for the Mission Village EIR in response to the Supreme Court’s GHG holding and the public review period concluded in February 2017. We will work and consult with the County to review and analyze all comments received during the public review period and to complete the regulatory process and certification of the additional analysis under CEQA. The Mission Village development plan and additional analysis contemplate specific mitigation measures and project design features intended to reduce, mitigate and offset 100 percent of the net GHG emissions from the Mission Village project. While the Supreme Court’s ruling may result in us having to pay certain attorneys’ fees or costs, the development plan for the Mission Village project described in the additional environmental analysis released by the County does not contemplate a reduction in the number of homesites or amount of commercial square feet we desire to develop.

In August 2011, the Corps approved the EIS portion of the joint EIS/EIR and issued its provisional Section 404 Clean Water Act authorization (the “Section 404 Permit”) for Newhall Ranch. In September 2012, the Los Angeles Regional Water Quality Control Board (the “Regional Board”) unanimously adopted final section 401 conditions and certified the Section 404 Permit. In October 2012, opponents filed a petition for review and reconsideration of the Regional Board’s actions to the State Water Resources Control Board (the “State Board”). The State Board has not determined whether to accept or deny the petition; however, the Regional Board actions remain valid while the petition is under review by the State Board. On October 19, 2012, after consulting with the USEPA, the Corps issued the Section 404 Permit.

In March 2014, five plaintiffs filed a complaint against the Corps and the USEPA in the U.S. District Court, Central District of California (Los Angeles) (the “U.S. District Court”). The complaint alleges that these federal agencies violated various statutes, including the Clean Water Act, NEPA, the Endangered Species Act and the National Historic Preservation Act in connection with the Section 404 Permit and requests, among other things, that the U.S. District Court vacate the Corps’ approvals related to the Section 404 Permit and prohibit construction activities resulting in the discharge of dredged or fill material into federal waters until the Corps issues a new permit. We were granted intervenor status by the U.S. District Court in light of our interests as the landowner and holder of the Section 404 Permit. In September 2014, the U.S. District Court issued an order granting motions to dismiss the USEPA from this action. The dispositive cross-motions for summary judgment were then filed. The U.S. District Court reviewed and resolved all claims in the case by summary judgment. In June 2015, the U.S. District Court issued a favorable order granting the Corps’ and our motions for summary judgment and denying plaintiff’s summary judgment motion. In September 2015, plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”). The Ninth Circuit briefing is completed and oral argument occurred in February, 2017.

Until a decision has been made by the Ninth Circuit, we cannot predict the outcome of this matter. The monetary impact of an adverse Ninth Circuit ruling, if any, cannot be estimated at this time. Although this federal court proceeding does not include any monetary damage claims, it could result in the need to reassess certain elements of the project’s potential impacts and to modify certain aspects (such as specific mitigation measures or project design features) related to the development plan for Newhall Ranch. An adverse ruling could adversely affect the length of time or the cost required to obtain the necessary governmental approvals to develop Newhall Ranch or a development area within Newhall Ranch, as well as result in additional defense costs or settlement costs, which may not be covered by insurance. An adverse ruling might also require us to pay attorneys’ fees and court costs and modify the development plan for Newhall Ranch, which could reduce the number of homesites or amount of commercial square feet we desire to develop, increase our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project.

In December 2012, we sold all of the shares of Valencia Water Company through an eminent domain settlement agreement to Castaic Lake Water Agency (the “CLWA”). Valencia Water Company was a privately-owned water retailer serving portions of the Santa Clarita Valley that was regulated by the California Public Utilities Commission.

In February 2013, a local environmental group called the Santa Clarita Organization for Planning and the Environment (“SCOPE”) filed a lawsuit in the Superior Court seeking to invalidate the eminent domain settlement agreement based on a range of claims, including: (1) the CLWA is unlawfully providing retail water service in violation of the CLWA’s enabling act, and (2) the CLWA unlawfully acquired and owns Valencia Water Company’s stock in violation of Article XVI, section 17 of the state Constitution. The Superior Court rejected those claims and entered judgment upholding the eminent domain settlement in April 2015, which was upheld on appeal by the Court of Appeal in an opinion issued in July, 2016. SCOPE subsequently filed a petition for review by the Supreme Court, which the Supreme Court denied in November, 2016 and as a result of such denial the Superior Court’s April 2015 judgment upholding the eminent domain settlement agreement is now final.

In April 2014, the Newhall County Water District (“NCWD”), a local water retailer in the Santa Clarita Valley, filed a lawsuit in the Superior Court against the CLWA alleging the same claims as those brought by SCOPE in the action described above that is now final, namely that (1) the CLWA is unlawfully providing retail water service in violation of the CLWA’s enabling act; and (2) the CLWA unlawfully acquired and owns Valencia Water Company’s stock in violation of Article XVI, section 17 of the state Constitution. NCWD’s writ petition/complaint sought a writ of mandate: (1) directing the CLWA to stop providing retail water service through Valencia Water Company; and (2) directing the CLWA to divest itself of Valencia Water Company’s stock. The petition/complaint also sought declaratory relief regarding unlawful retail water service and unlawful acquisition and holding of Valencia Water Company’s stock. We were not named as a party to the lawsuit, but intervened to assist the CLWA in defending these challenges to the eminent domain settlement agreement. The CLWA and we filed a motion for judgment on the pleadings based on the contention that the claims alleged in NCWD’s lawsuit are the same ones alleged in the earlier SCOPE lawsuit, which were denied by the April 2015 judgment entered in the SCOPE lawsuit. That motion was scheduled for hearing in December 2015. Also, in December 2015, the CLWA, NCWD and we filed a stipulation to stay this lawsuit to allow settlement discussions initiated by the CLWA. In December 2016, NCWD and the CLWA entered into a settlement agreement, wherein NCWD agreed to dismiss this lawsuit without prejudice and in that same month the request for dismissal was entered by the Superior Court thereby dismissing this lawsuit without prejudice. In connection with that settlement agreement, we entered into a tolling agreement with NCWD and the CLWA, which tolls any statute of limitations applicable to NCWD’s claims that CLWA is unlawfully providing retail water service in violation of the CLWA’s enabling act based upon facts existing as of April 21, 2014 for the period of time specified in the settlement agreement. Given the final judgment in the action filed by SCOPE discussed above and that the claims alleged in NCWD’s lawsuit are the same ones alleged in the earlier SCOPE lawsuit, we do not expect the Court to grant the relief sought by NCWD even if NCWD were to refile the lawsuit it recently dismissed without prejudice.

We maintain comprehensive insurance coverage for general liability, property, workers’ compensation and other risks on all of our properties and operations. Our management believes that such insurance provides adequate coverage.

The following table sets forth certain information concerning our directors and executive officers following this offering:


	Per Share		Total
Initial public offering price	$	14.00	$	294,000,000
Underwriting discounts and commissions (1)	$	0.91	$	19,110,000
Proceeds to us (before expenses)	$	13.09	$	274,890,000


Citigroup		J.P. Morgan
RBC Capital Markets		Wells Fargo Securities


Deutsche Bank Securities		Evercore ISI		Zelman Partners LLC		JMP Securities


	As of December 31, 2016
	Historical		As Adjusted
	(in thousands)
Cash	$	62,304	$	431,787

Debt:
Macerich note	$	65,130	$	65,130
Settlement note		4,257		4,257

Total debt		69,387		69,387
Capital:
Total members’ capital		242,916		510,697
Noncontrolling interests		1,265,197		1,366,899

Total capital		1,508,113		1,877,596

Total capitalization	$	1,577,500	$	1,946,983


	Class A Common Shares Acquired					Total Consideration					Average Price Per Share
	(in thousands, except share and per share data)
	Number		Percent			Amount		Percent

Existing shareholders		111,768,880		79.9	%	$	1,948,818		83.2	%	$	17.44

Investors in this offering		21,000,000		15.0	%	$	294,000		12.5	%	$	14.00

Investor in concurrent private placement		7,145,000		5.1	%	$	100,045		4.3	%	$	14.00

Total		139,913,880		100.0	%	$	2,342,863		100.0	%	$	16.75


Prospectus Summary			1
Risk Factors			26
Cautionary Statement Regarding Forward-Looking Statements			51
Use of Proceeds			52
Distribution Policy			53
Capitalization			54
Dilution			55
Selected Historical Consolidated Financial Information			57
Unaudited Pro Forma Condensed Consolidated Financial Information			58
Management’s Discussion and Analysis of Financial Condition and Results of Operations			66
Business and Properties			85
Management			118
Executive and Director Compensation			129
Principal Shareholders			136
Certain Relationships and Related Party Transactions			140
Policies with Respect to Certain Activities			150
Structure and Formation of Our Company			153
Description of Shares			157
The Limited Liability Company Agreement of the Operating Company			167
The Operating Agreement of the San Francisco Venture			175
Shares Eligible for Future Sale			179
United States Federal Income Tax Considerations			182
Underwriting			186
Legal Matters			194
Experts			194
Where You Can Find More Information			194
Index to Financial Statements			F-1
Appendix I—Market Overview			I-1


Initial public offering price per Class A common share			$	14.00
Net tangible book value per Class A common share as of December 31, 2016	$	12.35
Net increase in net tangible book value per Class A common share attributable to this offering and the concurrent private placement		0.16

Adjusted net tangible book value per Class A common share as of December 31, 2016				12.51

Dilution in adjusted net tangible book value per Class A common share to investors in this offering			$	1.49


	For the year ended December 31,
	2016			2015
	(in thousands)
Statement of Operations Data:
Revenues:
Land sales	$	9,561		$	17,229
Land sales—related party		2,512			6,065
Management services—related party		16,856			—
Operating properties		10,439			12,288

Total revenues		39,368			35,582

Costs and expenses:
Land sales		356			(2,862	)
Management services		9,122			—
Operating properties		10,656			10,161
Selling, general and administrative		120,667			27,542
Management fees—related party		1,716			5,109

Total costs and expenses		142,517			39,950

Equity in loss from unconsolidated entity		(1,356	)		—

Loss before income tax benefit		(104,505	)		(4,368	)
Income tax benefit		7,888			546

Net loss		(96,617	)		(3,822	)
Net loss attributable to noncontrolling interests		(63,351	)		(1,137	)

Net loss attributable to the company	$	(33,266	)	$	(2,685	)

Per Share Data:
Net loss per Class A common share—basic and diluted	$	(0.89	)	$	(0.07	)
Net loss per Class B common share—basic and diluted	$	(0.00	)		—
Weighted average Class A common shares outstanding—basic and diluted		37,795,447			36,613,190
Weighted average Class B common shares outstanding—basic and diluted		49,547,050			—

Balance Sheet Data (as of the end of the period):
Inventories	$	1,360,451		$	259,872
Cash and cash equivalents		62,304			108,657
Marketable securities held to maturity		20,577			25,000
Total assets		2,114,582			441,851
Total liabilities		606,469			93,418
Total noncontrolling interests		1,265,197			87,511
Total capital		1,508,113			348,433


	(A)			(A)		(A)
	Historical
	Year Ended December 31, 2016			Period from January 1, 2016 through May 2, 2016		Period from January 1, 2016 through May 2, 2016			(B)						Year Ended December 31, 2016
	Five Point Holdings, LLC			Five Point Management Company		The San Francisco Venture			Reclassification Adjustments			Pro forma Adjustments related to the transactions			Pro Forma Consolidated
Revenues:
Land sales	$	9,561		$	—	$	—		$	—		$	—		$	9,561
Land sales—related party		2,512			—		—			249			—			2,761
Management services—related party		16,856			6,285		—			—			(742	)(C)		22,399
Operating properties		10,439			—		192			—			(159	)(D)		10,472
Home sales		—			—		17,526			—			(17,526	)(D)		—

Total revenues		39,368			6,285		17,718			249			(18,427	)		45,193

Costs and expenses:
Land sales		356			—		—			—			—			356
Cost of home sales		—			—		16,785			—			(16,785	)(D)		—
Management services		9,122			—		—			—			—			9,122
Operating properties		10,656			—		—			—			—			10,656
Field		—			—		234			(234	)		—			—
Builder marketing		—			—		1,752			(1,752	)		—			—
Selling, general, and administrative		120,667			5,514		4,084			2,235			(27,624	)(E)		104,876
Management fees—related party		1,716			—		—			—			(1,716	)(C)		—

Total costs and expenses		142,517			5,514		22,855			249			(46,125	)		125,010

Equity in (loss) earnings from unconsolidated entities		(1,356	)		378		—			—			15,599	(F)		14,621

(Loss) income before income tax benefit (provision)		(104,505	)		1,149		(5,137	)		—			43,297			(65,196	)
Income tax benefit		7,888			—		—			—			1,013	(G)		8,901

Net (loss) income		(96,617	)		1,149		(5,137	)		—			44,310			(56,295	)
Less net (loss) income attributable to noncontrolling interests		(63,351	)		—		—			—			19,999	(H)		(43,352	)

Net (loss) income attributable to the company	$	(33,266	)	$	1,149	$	(5,137	)	$	—		$	24,311		$	(12,943	)

PER SHARE INFORMATION:
Net loss per Class A common share—basic and diluted	$	(0.89	)												$	(0.35	) (I)
Net loss per Class B common share—basic and diluted	$	(0.00	)												$	(0.00	) (I)
WEIGHTED AVERAGE SHARES OUTSTANDING
Class A common shares
Basic and diluted		37,795,447														38,456,375	(I)
Class B common shares
Basic and diluted		49,547,050														74,320,575	(I)


Management services from the development management agreement with FPL	$	(1,674	)
Management services from the management arrangement with FPC-HF		(468	)
Management services from the development management agreement for Treasure Island and the Phase 1 Land		1,400

Total adjustment to revenue from management services—related party	$	(742	)



Removal of expenses related to the assets and liabilities transferred to the Lennar-CL Venture, including sales, marketing and field expenses related to the construction and sale of the homes as described in (D)	$	(2,755	)
Rent expense related to assumed lease as a result of the formation transactions and the San Francisco Venture transactions		580
Salary expense related to hiring certain employees of Lennar primarily responsible for development at The San Francisco Shipyard and Candlestick Point		4,800
Removal of stock compensation expense for RSUs that immediately vested (1)		(20,491	)
Stock compensation expense for RSUs that vest over 1.5 to 3.5 years (2)		5,469
Removal of bonuses paid in conjunction with the formation transactions (3)		(12,000	)
Removal of transaction costs related to the formation transactions and the San Francisco Venture transactions (3)		(3,227	)

Total adjustment to selling, general and administrative	$	(27,624	)


Investment in FPL	$	227
Investment in FPC-HF		(605	)
Investment in Great Park Venture		15,977

Total adjustment to equity in earnings from unconsolidated entities	$	15,599


Company’s share of net income (1)	$	25,174
Less: amortization of basis differences arising from step-up in inventory		(9,197	)

Equity in earnings in Great Park Venture from results of operations from January 1, 2016 to May 2, 2016	$	15,977


Pro forma loss before income tax	$	(65,196	)
Less pro forma loss before income tax attributable to noncontrolling interests		(43,352	)

Pro forma loss before income tax attributable to the Company		(21,844	)
Maximum statutory tax rate (1)		40.75	%

Pro forma income tax benefit		8,901
Less prior recorded income tax benefit		7,888

Adjustment to income tax benefit	$	1,013



(A) Pro forma loss before income tax benefit attributable to Class A units of the San Francisco Venture (1)	$	(21,862	)
(B) Pro forma loss before income tax benefit attributable to Class A units of the operating company not held by Five Point		(21,490	)

Pro forma loss before income tax benefit attributable to noncontrolling interests ((A) + (B))	$	(43,352	)
Less loss before income tax benefit attributable to noncontrolling interests, before adjustment		(63,351	)

Adjustment to noncontrolling interests	$	19,999



Pro forma net loss	$	(12,943	)
Adjustment for net loss attributable to Class A units of the operating company issued for the RSUs that vested immediately (1)		(396	)

Pro forma net loss available to common shareholders		(13,339	)

Pro forma net loss attributable to Class A common shares—basic and diluted	$	(13,331	)

Pro forma net loss attributable to Class B common shares—basic and diluted	$	(8	)

Basic and diluted
Historical weighted average Class A common shares outstanding		37,795,447
Pro forma adjustments
Additional Class A common shares issued in formation transactions (3)		266,053
RSUs immediately vested in conjunction with the formation transactions (1)		394,875

Total pro forma adjustments		660,928

Pro forma weighted average Class A common shares outstanding—basic and diluted		38,456,375

Historical weighted average Class B common shares outstanding		49,547,050
Pro forma adjustments
Issuance of Class B common shares in connection with the formation transactions (2)		24,773,525

Total pro forma adjustments		24,773,525

Pro Forma weighted average Class B common shares outstanding—basic and diluted		74,320,575

Net loss per Class A common share—basic and diluted	$	(0.35	)
Net loss per Class B common share—basic and diluted	$	(0.00	)


	Period from May 2, 2016 to December 31, 2016
	(in thousands)
Statement of Operations Data
Revenues
Land sales—related party	$	405
Operating property revenue		62
Management services—related party		3,532

Total revenues		3,999

Costs and expenses
Management services		110
Selling, general, and administrative		18,093

Total costs and expenses		18,203

Segment loss	$	(14,204	)


	Period from May 2, 2016 to December 31, 2016
	(in thousands)
Statement of Operations Data
Revenues
Land sales	$	15,719
Land sales—related party		6,786
Management services—related party		13,325

Total revenues		35,830

Costs and expenses
Land sales		12,093
Management services		9,012
Selling, general and administrative		18,806
Management fees—related party		75,310

Total costs and expenses		115,221

Interest income		11,723

Segment loss	$	(67,668	)


	Period from May 2, 2016 to December 31, 2016
	(in thousands)
Segment net loss from operations	$	(67,668	)
Less net income of management company		4,312

Net loss of Great Park Venture		(71,980	)

The Company’s share of net loss		(26,992	)
Basis difference accretion		25,636

Equity in loss in Great Park Venture	$	(1,356	)


Indebtedness	Principal Balance (1)		Fixed / Floating Rate	Effective Annual Interest Rate	Estimated Principal Balance at Maturity (1)		Maturity Date
Settlement note (2)	$	4,257	Fixed	12.8%	$	5,000		2018	(2)
Macerich note (3)	$	65,130	Floating	LIBOR +2.00%	$	65,130		2018	(3)


	For the year ended December 31
	2016			2015
Operating activities	$	(124,637	)	$	(41,373	)
Investing activities		83,327			4,388
Financing activities		(5,043	)		(6,579	)


	Payment due by period
	(in thousands)
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating lease obligations	$	10,047	$	2,966	$	5,928	$	1,153	$	—
Interchange funding agreement (1)		23,800		23,800		—		—		—
Water purchase agreement (2)		38,680		1,157		2,427		2,588		32,508
Settlement Note		5,000		—		5,000		—		—
Related party EB-5 loan reimbursements (3)		116,016		4,211		47,087		64,718		—

Total	$	193,543	$	32,134	$	60,442	$	68,459	$	32,508


									Entitlement Status (A)
Development Area	Acres (Approx.) (B)		Homesites		Commercial Square Feet (Approx.) (C)		Actual or Anticipated Year of First Delivery		State & Federal Permits (D)	General Plan / Zoning	VTTM (E)	Final Map
Available for Future Sale
Mission Village		1,262		4,055		1,555,100		2020	✓	✓	✓
Landmark Village		293		1,444		1,033,000		2024	✓	✓	✓
Homestead South		1,745		3,617		66,400		2025	✓	✓
Homestead North		1,110		1,818		1,250,000		2029	✓	✓
Potrero Valley		2,500		4,385		245,000		2029	✓	✓
Entrada South		382		1,574		730,000		2021		✓
Entrada North		457		1,150		2,624,400		2028	✓	✓
Legacy Village		1,758		3,457		839,000		2027		✓
Valencia Commerce Center		588		—		3,161,585		2026		✓

Community Total		10,095		21,500		11,504,485


											Entitlement Status (A)
Development Area	Acres (Approx.)		Homesites			Commercial Square Feet (Approx.) (B)			Actual or Anticipated Year of First Delivery		State & Federal Permits	General Plan / Zoning	VTTM	Final Map
Previously Sold
Pavilion Park		172		947			—			2013	✓	✓	✓	✓
Beacon Park		234		1,029			—			2014	✓	✓	✓	✓
Broadcom Commercial		79		—			2,000,000			2015	✓	✓	✓	✓
High School		43		—			—			2014	✓	✓	✓	✓
Parasol Park		85		727			—			2016	✓	✓	✓	✓
Development Area 7		278		840			—			2015	✓	✓	✓	✓
Development Area 1 West Affordable		15		323			—			2016	✓	✓	✓	✓

Subtotal		906		3,866			2,000,000
Available for Future Sale
Development Area 1 South		75		(C	)		(C	)		2018	✓	✓	✓
Development Area 1 West		78		(C	)		(C	)		2018	✓	✓	✓
Development Area 4 Residential (D)		200		1,102			—			2017	✓	✓	✓	✓
Development Area 4 Commercial		10		—			70,000			2019	✓	✓	✓	✓
Development Areas 2, 3, 5 and 6 (E)		852		(C	)		(C	)		2018	✓	✓	✓

Subtotal		1,215		5,634			2,900,000

Community Total		2,121		9,500			4,900,000


Name	Age		Position
Emile Haddad		58	Chairman, President and Chief Executive Officer
Erik R. Higgins		49	Chief Financial Officer and Vice President
Michael Alvarado		51	Chief Legal Officer, Vice President and Secretary
Michael White		55	Treasurer, Vice President and Assistant Secretary
Lynn Jochim		54	Executive Vice President
Greg McWilliams		65	Regional President—Southern California
Kofi Bonner		61	Regional President—Northern California
Rick Beckwitt		58	Director
Kathleen Brown		71	Director
William Browning		63	Director
Evan Carruthers<