파이브 포인트 홀딩스(FPH) 2026년 3분기 실적 컨퍼런스 콜: 토지 매각 연기, 가이던스 수정

핵심 요약

• 파이브 포인트 홀딩스(Five Point Holdings)는 2026년 3분기 연결 매출이 약 1,470만 달러, 연결 순손실이 440만 달러를 기록했으며, 해당 분기 동안 완료된 토지 매각은 없었다고 발표했습니다.
• 그레이트 파크(Great Park) 배당금 및 인센티브 보수 지급액으로 4,040만 달러의 현금이 유입되었습니다. 파이브 포인트의 9월 말 기준 현금 및 현금성 자산은 3억 5,870만 달러, 총 유동성은 5억 7,620만 달러였습니다.
• 경영진은 토지 가격에 대한 이견 때문이 아니라 주택 판매 소진 둔화와 건설사의 기존 재고 때문에 수건의 토지 매각을 2027년으로 연기할 것으로 예상하고 있습니다.
• 회사는 현재 2026년 연간 연결 순이익이 약 2,000만 달러, 연말 현금 및 현금성 자산이 3억 달러 이상일 것으로 전망하고 있습니다.
• 발렌시아(Valencia)는 3,600개 이상의 주택 부지가 계획된 약 752에이커 규모의 홈스테드 사우스(Homestead South) 프로젝트 승인을 확보했습니다. 캔들스틱(Candlestick)은 다음 개발 단계에 진입했으며, 샌프란시스코 토지의 첫 인도는 2028년을 목표로 하고 있습니다.
• 하스스톤(Hearthstone)은 3분기 경영 관리 서비스 매출 약 650만 달러를 창출했으며, 34억 달러의 운용 자산(AUM)으로 분기를 마감했습니다.

주요 재무 데이터

사업 및 운영 성과

그레이트 파크

3분기 동안 건설사들은 2분기의 56채와 비교해 54채의 주택을 판매했습니다. 경영진은 분양 소진율이 선호하는 수준을 하회함에 따라 파이브 포인트가 이전에 계획했던 4분기 토지 거래 수건을 연기하는 방안을 검토 중이라고 밝혔습니다.

그레이트 파크 개발 관리 계약이 2028년 12월 31일까지 갱신되었습니다. 파이브 포인트는 벤처 파트너 배당금의 9%에 해당하는 인센티브 보수 수령 권리를 유지합니다. 그레이트 파크 경영 관리 서비스는 3분기 매출 740만 달러, 연중 누계 매출 2,340만 달러를 창출했습니다.

그레이트 파크 벤처는 분기 말 기준 1억 2,850만 달러의 현금을 보유했습니다. 이 현금은 파이브 포인트가 37.5%의 지분을 보유한 벤처의 소유입니다.

발렌시아

발렌시아 건설사들은 해당 분기 동안 2분기의 78채에서 증가한 92채의 주택을 판매했습니다. 로스앤젤레스 카운티는 약 752에이커 규모이자 3,600개 이상의 주택 부지가 계획된 홈스테드 사우스 승인을 확정했습니다.

파이브 포인트는 현재 로스앤젤레스 카운티 내 6,600개 이상의 주택 부지에 대한 분할 도면 승인을 확보했습니다. 경영진은 잔여 승인 결과에 따라 향후 몇 분기 동안 약 10,000개 주택 부지 확보를 목표로 작업하고 있습니다.

캔들스틱

파이브 포인트는 샌프란시스코 캔들스틱 개발의 다음 단계 공사에 착공했습니다. 프로젝트 계획에는 7,200개의 주택 부지, 280만 제곱피트의 상업 공간, 리테일, 호텔, 엔터테인먼트 및 기타 커뮤니티 용도의 55만 제곱피트가 포함됩니다.

경영진은 토지의 첫 인도가 2028년 하반기에 이루어질 것으로 예상하고 있습니다. 개발 지출은 점진적으로 늘어날 전망이며, 2027년 말 무렵부터 대규모 지출이 시작될 가능성이 있습니다.

하스스톤

하스스톤은 3분기에 약 650만 달러의 경영 관리 서비스 매출을 창출했습니다. 하스스톤 플랫폼은 34억 달러의 자산을 운용하며 기관 자원 제공자 및 주택 건설사에 토지 은행(land banking) 및 주거용 투자 관리 서비스를 제공합니다.

연중 누계 기준으로 하스스톤은 1,060만 달러의 현금 흐름과 780만 달러의 영업이익을 기여했으며, 경영진은 이는 예상치에 부합하는 수준이라고 밝혔습니다.

경영진 가이던스

파이브 포인트는 현재 2026년 4분기에 소규모 연결 순이익을 기록하고 연간으로는 약 2,000만 달러를 달성할 것으로 예상하고 있습니다. 또한 2026년을 3억 달러 이상의 현금 및 현금성 자산으로 마감할 것으로 전망합니다.

업데이트된 전망치는 2026년 그레이트 파크의 추가 토지 매각이 없고 발렌시아에서 약 5에이커가 매각될 것임을 전제로 합니다. 파이브 포인트는 당초 발렌시아 20에이커, 그레이트 파크 50에이커를 매각할 것으로 예상했으나, 올해 그레이트 파크 토지 17.7에이커는 이미 매각되었습니다.

경영진은 수정된 전망치가 토지 가격 하락이 아닌 거래 시점의 이연을 반영한 것임을 강조했습니다. 회사는 건설사들이 기존 재고를 소진함에 따라 지연된 거래가 2027년으로 이월될 것으로 보고 있습니다.

개발 투자와 관련해 경영진은 2027년 지출을 2026년에 계획된 약 1억 2,500만 달러 수준으로 유지하면서 발렌시아와 샌프란시스코 간의 지출 균형을 맞추고, 가시적인 매출 기회에 맞춰 지출을 집행할 계획입니다.

리스크 및 관전 포인트

• 높은 모기지 금리, 인플레이션 우려, 지정학적 불확실성 및 소비 심리 위축이 주택 구매력과 매수 수요를 압박하고 있습니다.
• 주택 판매 소진 둔화는 토지 거래를 더욱 지연시키고 분기별 실적 변동성을 초래할 수 있습니다.
• 샌프란시스코 개발 및 수익화는 장기간에 걸쳐 진행될 것이며, 토지의 첫 인도는 2028년에야 이루어질 것으로 예상됩니다.
• 주택 건설사들이 인도 연기나 이자 지급 연기 등 토지 은행 계약의 변경을 요구할 수도 있습니다. 하스스톤은 이러한 결정은 자본 파트너들과 함께 평가될 것이라 밝혔으며, 경영진은 플랫폼 전망에 중대한 변화는 관찰되지 않았다고 덧붙였습니다.
• 자본 배분은 주택 시장 상황과 개발 수요에 따라 달라질 수 있으며, 경영진은 재무적 유연성을 최우선으로 두는 한편 자사주 매입을 활용 가능한 수단으로 유지하고 있습니다.

애널리스트 Q&A 주요 내용

경영진은 토지 매각 지연이 주로 소진율 저하와 건설사의 기존 재고를 반영한 것이라고 분명히 했습니다. 거래 가격은 협의되었으나 건설사들이 현재 추가 토지를 필요로 하지 않는 상황입니다.

하스스톤과 관련하여 경영진은 어떠한 계약 변경 가능성도 각 펀드에 최선이 되는 방향에 따라 관련 자본 제공자들과 함께 검토할 것이라고 말했습니다. 현재 중대한 집중 위험이나 전망 변화는 확인되지 않았습니다.

캔들스틱에 대해 경영진은 파이브 포인트가 수평적 개발업체로 운영되며 2028년에 샌프란시스코 토지의 첫 인도를 예상한다고 재차 밝혔습니다. 회사는 수직적 개발 기회를 모색할 준비를 하고 있으나 아직 시장에 진입하지는 않았습니다.

자본 배분에 대해 파이브 포인트는 주가가 여전히 매력적이라고 평가했으나, 자사주 매입은 현재의 주택 시장 환경에서 개발 수요 및 유동성 확보 필요성과 균형을 이루어야 한다고 강조했습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Greetings and welcome to the Five Point Holdings third quarter 2026 conference call. As a reminder, this call is being recorded. This call may include forward-looking statements regarding Five Point Holdings' business, financial condition, operations, cash flow, strategy, and acquisitions and prospects. Forward-looking statements represent Five Point Holdings' estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could affect future results and may cause Five Point Holdings' actual activities or materially from the activities and results anticipated in forward-looking statements. These factors include those described in today's press release and Five Point Holdings' SEC filings, including those in the risk factor section of Five Point Holdings' most recent annual report on Form 10-K filed with the SEC.

Please note that Five Point Holdings assumes no obligation to update any forward-looking statements. Now, I would like to turn the call over to Daniel C. Hedigan, President and Chief Executive Officer.

Daniel Hedigan

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

During the third quarter, we continued making progress on several important fronts, even as market conditions have remained uncertain with higher interest rates driven by inflation concerns and weaker consumer confidence. Against this backdrop, we were focused on maximizing the long-term value of our California master-planned communities, while we are also expanding our relationships with leading home builders for our Hearthstone residential land banking platform. Our long-term strategy remains unchanged. We are focused on building a more diversified company that combines a significant embedded value in our strategic cash generating assets along with a growing stream of recurring asset-light, fee-based income. We believe these complementary businesses provide Five Point with multiple avenues for long-term value creation. Perhaps most importantly, we continue to maintain a strong balance sheet, which gives us the financial flexibility to execute our strategy while navigating the current challenges in the housing market. Turning to our financial results, Five Point generated consolidated revenue of $14.6 million for the third quarter and a small consolidated net loss of $4.4 million. As we detailed in our second quarter call, we did not close any significant land sale transactions at our active communities in the third quarter.

As we have discussed previously, the timing and size of individual land sale transactions can create considerable variability in our reported quarterly earnings. Importantly, Great Park continued to generate meaningful cash for Five Point, with distributions and incentive compensation payments totaling $40.4 million during the quarter. We ended September with $358.7 million in cash and cash equivalents, total liquidity of $576.2 million, and a debt-to-total capitalization ratio of 16.2%, which gives us a net debt to total capitalization ratio of just 3.8%. These metrics underscore the financial strength of our company and our ability to take a disciplined, long-term approach to managing our assets. As has been widely reported, the new home market has faced considerable challenges in recent months. Higher mortgage rates, driven by inflation and geopolitical uncertainty, along with weaker consumer confidence, have combined to pressure housing affordability and caused many prospective homebuyers to delay purchasing decisions. Selling home buyer demand influences our decisions regarding additional land sales, as we carefully balance absorption and demand within our communities to preserve and maximize the value of our remaining land.

As a result, we will likely elect to defer certain land sales that we previously anticipated closing in 2026 rather than transact in a less favorable market. Fortunately, as I've said before, if they're not making more land, entitlements in California are going to be difficult to achieve, and land does not spoil. The strength of our balance sheet gives us the flexibility to be patient and pursue land sales when market conditions support the values we believe our assets deserve. As a result, we now expect to generate a small amount of consolidated net income in the fourth quarter and end the year with approximately $20 million in net income. I want to emphasize an important point. Our revised outlook reflects the anticipated timing of land transactions rather than the decision on our part to reduce land pricing to accelerate sales. While we cannot control market conditions, we can control how we manage our land portfolio and protect the value of our assets.

We remain focused on maximizing the long-term value of our land. We have consistently taken a disciplined and prudent approach to developing and monetizing our communities. And maintaining that discipline remains particularly important in the current environment. Despite the more challenging housing backdrop, we achieved several important milestones during the quarter. Furthermore, the venture renewed our development management agreement through December 31, 2028. We believe this renewal reflects the value of our development expertise and our continued commitment to the successful execution of one of the country's premier master-planned communities. At Valencia, we made significant progress on entitlements, including improvements related to our Homestead South Village, which is planned for over 3,600 homesites.

This represents an important step in expanding our inventory of entitled home sites and positions Valencia for future development and monetization. In San Francisco, we recently celebrated groundbreaking for development activities at Candlestick, a significant milestone in advancing this unique waterfront property towards its next phase of development. I've been involved in several master-planned communities within California throughout my career, and I can say with conviction that opportunities to create an entire neighborhood of this scale from the ground up in a community as large and iconic as San Francisco simply do not come along very often. With 7,200 home sites, 2.8 million square feet of planned commercial space, and 550,000 square feet of space for retail, hotel, entertainment, and other community uses, we envision creating a vibrant and multifaceted community that will contribute to San Francisco's future as a global hub of technology and innovation. Meanwhile, Hearthstone continues to broaden our participation in the home building industry nationally through strengthened relationships with institutional capital providers and home builders. This asset management business adds an increasingly important source of recurring fee-based revenue and provides opportunities for growth, which requires substantially less direct balance sheet investment than traditional land development. Our balance sheet remains a cornerstone of our strategy.

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

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

Michael Alvarado

Thank you, Dan. I'll begin with an update on our California master-planned communities, followed by a discussion of Hearthstone and the trends we're seeing across our home-builder relationships. Starting with the Great Park, the venture continued advancing development activities during the third quarter. Builders sold 54 homes during the quarter compared with 56 in the second quarter. While absorptions remain below the levels we would like to see, Great Park continues to benefit from its premier Orange County location, for established infrastructure and highly desirable residential communities. As Dan mentioned, we will likely elect to defer several land sale transactions that we previously anticipated closing in the fourth quarter. We continue to work closely with our builder partners to evaluate the timing and structure of land sales while remaining focused on protecting the long-term value of the land.

We also reached an important milestone with the renewal of our Development Management Agreement through December of this year, of 2028. This agreement extends our role in managing the continued development of Great Park and provides an ongoing source of fee-based revenue. As a reminder, we are also entitled to incentive compensation payments equal to 9% of all distributions to the Great Park Venture Partners. During the quarter, our Great Park Management Services business generated $7.4 million in revenue, bringing the year-to-date total to $23.4 million. We believe Great Park remains exceptionally well positioned, supported by the scarcity of developable land in Orange County, the quality of the community, and significant development opportunities that remain. Turning to Valencia, we made significant progress during the quarter on an important entitlement initiative that substantially expands our future development opportunities in Los Angeles. In September, the Los Angeles County Board of Supervisors confirmed the approval of the Homestead South project that had first been approved by the Planning Commission earlier in the quarter.

Homestead South encompasses approximately 752 acres and is planned for over 3,600 home sites. With this milestone, we have now more than 6,600 home sites in Los Angeles County that we have approved subdivision maps and we are working toward increasing that figure to approximately 10,000 over the coming quarters, subject to the remaining approval processes. This represents an important addition to our portfolio of entitled land and supports our long-term strategy of creating value through the entitlement and development process. Importantly, securing entitlements across multiple villages provides us with optionality with respect to development sequencing and product segmentation that will allow us to thoughtfully allocate capital and optimize revenues at Valencia. On the sales front, builders of Valencia sold 92 homes during the third quarter, compared with 78 homes in the second quarter. We continue working with our builder partners to manage inventory and position the community for future success. Valencia remains a significant revenue generating opportunity for Five Point.

Our continued investment in entitlements and infrastructure is designed to enhance the value and marketability of our land over time while providing home builders with access to well-located home sites and a supply-constrained market. Moving up the coast, September marked an important milestone for our Candlestick Development as celebrated the groundbreaking for the next phase of development activities. The event was attended by San Francisco's Mayor Daniel Lurie and other prominent national and local officials, underscoring the importance of the project to the city and the surrounding community. The groundbreaking marks an important transition from the planning and entitlement process toward physical development of the property. Like our work and our other active communities, we'll be creating and installing the fundamental infrastructure to support the future construction of homes, commercial space, parks, and community amenities that will create a vibrant and multifaceted destination that includes a mix of housing, employment, and recreation. We believe this project location, scale, and mix of residential and commercial uses provide an opportunity to create substantial value over the long term, while contributing to the revitalization of San Francisco's southeastern waterfronts. Although development and monetization will occur over an extended period, we view the progress made during the quarter as a meaningful step toward realizing the potential of this asset.

Finally, I'd like to discuss Hearthstone, which continues to represent an important component of our strategy to diversify Five Point's operations and expand our partnership in the national residential real estate market. During the third quarter, Hearthstone generated approximately $6.5 million in management services revenue. Hearthstone currently oversees approximately $3.4 billion in assets under management and provides land banking and residential investment management services to relationships with institutional capital providers and home builders across the country. The business is designed to address an increasingly important need within the home building industry. Builders continue to seek ways to improve capital efficiency, reduce the amount of land carried on their balance sheets, and maintain flexibility in managing their future home site pipelines. By point, the model creates opportunities to generate recurring management fees and potential performance-based income while limiting the amount of our own capital required to support the growth. Our objective is to continue expanding Hearthstone's institutional relationships and home builder partnerships, building on its established platform and positioning the business for growth as demand for capital efficient land solutions evolves.

Overall, we're pleased with the progress we've made across our communities and at Hearthstone. Despite the challenges in today's housing market, our teams continue to move important initiatives forward, secure valuable entitlements, and advance development activities that will position us for future growth. We remain focused on executing our development plans, strengthening our builder relationships, and preparing our communities to take advantage of improving market conditions. We're optimistic about what lies ahead and confident in our ability to continue unlocking the significant value of our assets.

With that, I'll turn the call over to Kim.

Kim Tobler

Thank you, Mike. As Dan mentioned, strong balance sheet and liquidity give us flexibility to take a disciplined, long-term approach to managing our assets. So as expected, we did not close any land sales during the quarter, and we reported a consolidated net loss of $4.4 million. Against that backdrop, I want to emphasize our strong cash and liquidity position. At September 30th, we had $358.7 million in cash and cash equivalents, as well as $217.5 million of availability on a revolving credit facility, resulting in total liquidity of $576.2 million. This doesn't include $128.5 million of cash held by the Great Park Venture as of September 30th. Our debt to total capitalization ratio was 16.2% and our net debt was $91.3 million representing a net debt to total capitalization ratio of 3.8%. We have no borrowings outstanding under our revolving credit facility. In addition, as Dan said, we do not have any material debt maturities until 2030.

As we navigate the current market environment, we will continue to match our major development expenditures with near-term revenue opportunities. Now a little more detail about our cash flow for the quarter. In addition to the operating cash flow from our Great Park and Hearthstone management activities, the other significant sources of cash this quarter included the following. A $31.8 million distribution from the Great Park Venture, an $8.6 million incentive compensation payment from the Great Park Venture, $8.9 million of CFD reimbursements at the Valencia project, $2.8 million of interest income. The significant non-operating uses of cash during the quarter included $38.1 million of development costs at Valencia and San Francisco, and $1.6 million of EB-5 principal and interest payments with $15.1 million remaining outstanding on this obligation at quarter end. As I've already mentioned, we reported a consolidated net loss of $4.4 million for the quarter. Our third quarter results were driven primarily by our reoccurring management activities at the Great Park and Hearthstone.

Management services revenue made up $13.9 million of the $14.7 million of consolidated revenues, including $7.4 million for management of the Great Park Venture, of which $4 million represented incentive compensation, and $3.5 million for the $6.5 million from our Hearthstone Asset Management Platform. We had $5.7 million of costs and expenses associated with our management services activities, $1.6 million of which was associated with the Great Park Venture, and $4 million of which was associated with Hearthstone. We recognized $2.2 million of equity and loss from our unconsolidated entities, $2.7 million of which came from the Great Park Venture. Our third quarter SG&A was $12.5 million, compared with $14.3 million for the prior year third quarter. Hearthstone's assets under management and fee paying assets under management remained unchanged at $3.4 billion and $2.8 billion respectively at quarter end. Year to date, Hearthstone has provided $10.6 million of cash flow and $7.8 million of income from operations, which is tracking our expectations.

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

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

Operator

Excellent. We will now be conducting a question and answer section.

[Operator Instructions]

Our first question is from Alan Ratner of Zelman & Associates. Thank you, Alan. You may proceed with your question.

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Alan Ratner

Hey guys, good afternoon. Um, appreciate all the details so far, recognizing it's a tricky environment. Yes, I get into delay lot sales. You know, I think it makes sense in the current backdrop. I'm curious as you think through that, is that more a function of, as you've been having conversations with builders, their bid pricing was coming in lower than your expectations or what you're willing to sell at, or is it more you kind of canvassing the home sale environment in these communities and deciding that, you know, you want to, you don't want to flood the projects with more lots as home sales are soft? I'm just curious if it's more based on a bid-ask spread that's widening or if this is more your view based on home sale transactions.

Daniel Hedigan

Hi, Alan. Thank you for the question. It is actually more about absorptions. It's not about land pricing. We've got fully negotiated transactions, but the builders are basically saying there's not a current need for the land. So it isn't that we can't come to a price. It's more about how much inventory they have right now and just really the slowing absorption. So that's really why we're looking at it and saying, all right, we'll work with you. We'll push these land sales in the 2027.

Alan Ratner

Got it. Okay. That's helpful. And what I kind of figured. Second question on Hearthstone and land banking. So, you know, land banking has been a pretty, uh, pretty discussed issue on a lot of the home builder conference calls lately. And what we're hearing from some builders is that they are in the process of renegotiating some of their land banking contracts. Mostly, it sounds like it's either pushing out takedowns or deferring interest payments, but in some cases, you know, anecdotally, we're hearing some renegotiation on actual lot takedown prices as well. And I was hoping you could just clarify or maybe explain your role in this situation, assuming that a builder that Hearthstone banks land with comes to you to renegotiate an option contract. How does that flow through to you as an asset manager there? Meaning like if you decide to defer interest payment or even reduce a takedown price.

Daniel Hedigan

Alan, I think what I'm going to do is have Kim answer that question for you.

Kim Tobler

Hi, Alan. Yes, that's, I mean, this is something that Hearthstone has had to deal with over the 30 years that they've been in operation. And they're managing capital. So they would be discussing all of those types of situations with their capital partners that they're managing, and they'll come to a conclusion of what they think is best overall for that fund.

Alan Ratner

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

Kim Tobler

You know what, Hearthstone, you know, has a has a national platform and, uh, you know, over that platform there'll be lots of things going on. I haven't seen any concentrations or anything like that that's occurred over the period. I'm sure there are conversations going on, but, uh, we haven't seen a material change in the outlook.

Alan Ratner

Got it. Okay. Appreciate that. And then one final one, you know, congrats on the groundbreaking at, in San Francisco. You know, appreciate the guidance at Valencia in terms of the lot sales. Is there any updated timeline you can give us as far as how we should think through both cash, flow or cash expenses from development as well as when the first sales might start to take place in San Francisco?

Daniel Hedigan

Let me actually see if Kim can actually talk to you a little bit about the cash flow. But our expectation would be to have our first sales in San Francisco in 2028.

Kim Tobler

Yes, so Alan, as Dan said, we're planning towards the first sales in 2028, probably towards the latter part of that year. The spend is going to be a slow buildup with probably towards the end of 2027, getting into some larger amounts and going into 2028 to have things ready for sale in 2029. I mean, in 2028.

Alan Ratner

Got it. That's really helpful. So if this quarter's land spend was, I think you said, roughly $40 million between Valencia and San Francisco, should we think about that, you know, kind of moderately increasing through 2027 on a quarterly basis as San Francisco gets a little bit more um, more in the weeds?

Kim Tobler

It can. We're going to be trying to balance that out. I'm trying not to spend more than we've spent this year in total. So I think I said last time we spoke, it was about $125 million for the total for the year this year. And I'm trying to keep it around that next year as well. So it kind of balances back and forth between between Valencia and San Francisco. And at the same time, we're going to moderate any development spend to be in line with the revenue opportunities we see in the future.

Alan Ratner

That's great. Really appreciate all the detail. Thanks a lot.

Operator

Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad and the confirmation tone will indicate that you're going to enter the queue. Our next question is from Michael Odell of MidOcean Partners. Michael, you may begin with your question.

Unknown Speaker

Thanks guys, all my questions were actually answered.

Operator

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

Unknown Speaker

Hi, I have a couple questions for Kim. He mentioned that the Great Park's neighborhood has $128 million. Is that all belong to Five Point or is that 37.5% of that belong to you?

Kim Tobler

It belongs to the venture and we own 37.5% of the venture. So yes, that's the way I would think about it.

Unknown Speaker

Okay, and then regarding capital allocation, I think you've done some minor share repurchases. And debt reduction, could you discuss the, you know, the plans for capital allocation, say, for the next year or two?

Kim Tobler

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

Operator

Okay, thank you. Our next question is from Eddie Liu of Kaiser Permanente. Eddie, you may proceed with your question.

Unknown Speaker

Thank you, guys. I have a question for Dan. So this is in regards to San Francisco Candlestick Point development. So has there been any tech company or AI company approach you guys? And also you said 2028, that's for the land sale, right? There's no residential, it's just the utilities don't be at 2028, correct?

Daniel Hedigan

Correct. So, yes, Eddie, the, you know, we're, as a horizontal developer, what we're focused on is our, is land deliveries, and our initial land delivery should be in 2028 up in San Francisco. As far as the question about the development, we have elected not to go into the market. That's one of the things that we've felt was important in that market is to get the project started. Hence, the the groundbreaking we had in September, and we're now working on a you know really a a comprehensive plan for exploring a lot of market opportunities out there. San Francisco is an incredibly strong market right now with a lot of opportunities, and so we're actually just now getting ready to start exploring um the next steps as far as the vertical development.

Operator

Okay, thank you. This concludes our question and answer section. I would like to turn the floor back over to Dan for closing comments.

Daniel Hedigan

Thank you. On behalf of our management team, we thank you for joining us on today's call. We look forward to speaking with you next year.

Operator

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