Five Point Holdings, LLC (NYSE:FPH), owner and developer of large mixed-use, master-planned communities in California, late Tuesday reported a net loss for the third quarter ended Sept. 30 of $21.9 million. The net loss attributable to non-controlling interests totaled $11.9 million, resulting in a net loss attributable to the company of $10.0 million.for the third quarter of 2018.
Revenues of $13.0 million for the three months ended September 30, 2018 were primarily generated from management services. The adoption of new revenue accounting guidance on January 1, 2018 has resulted in accelerated recognition of revenue from variable incentive compensation in the development management agreement with the Great Park Venture.
Equity in loss from unconsolidated entities was $4.0 million for the three months ended September 30, 2018. The loss was primarily due to the proportionate share of the Great Park Venture’s net loss during the quarter of $10.0 million. After adjusting for amortization and accretion of the basis difference, our equity in loss from our 37.5% percentage interest in the Great Park Venture was $3.5 million. Equity in loss from the 75% interest in the Gateway Commercial Venture was $0.5 million for the three months ended September 30, 2018.
Selling, general, and administrative expenses were $26.2 million for the three months ended September 30, 2018.
As of September 30, 2018, total liquidity of $718.9 million was comprised of cash and cash equivalents totaling $594.9 million and borrowing availability of $124.0 million under a $125.0 million unsecured revolving credit facility. Total capital was $1.9 billion, reflecting $3.0 billion in assets and $1.1 billion in liabilities.
By segment, the results were:
Newhall Segment. Total segment revenues were $1.4 million for the third quarter of 2018 and were derived from agricultural leasing and the sale of citrus crops. Selling, general, and administrative expenses were $3.6 million for the three months ended September 30, 2018.
San Francisco Segment. Total segment revenues were $1.1 million for the third quarter of 2018. Revenues during the quarter were mostly attributable to fees generated from management agreements. Selling, general, and administrative expenses were $5.3 million for the three months ended September 30, 2018.
Great Park Segment. Total segment revenues were $11.3 million for the third quarter of 2018. Revenues were mainly attributable to management services we provide to the Great Park Venture. The Great Park segment’s net loss for the quarter was $6.7 million, which included net loss of $10.0 million attributed to the Great Park Venture that is not consolidated in our financial statements. After adjusting to account for a difference in investment basis, the Company’s equity in loss from the Great Park Venture was $3.5 million for the three months ended September 30, 2018.
Commercial Segment. For the three months ended September 30, 2018, the Commercial segment recognized $6.9 million in revenues from rental income at the Five Point Gateway Campus and property management services provided by us at the Five Point Gateway Campus. Segment expenses were mostly comprised of depreciation, amortization and interest expense totaling $5.8 million. Segment net loss was approximately $46,000. Our share of equity in loss from the Gateway Commercial Venture totaled $0.5 million for the three months ended September 30, 2018.
Emile Haddad, chairman and CEO, said, “Consistent job growth during the past six years and limited new residential construction activity in San Francisco, Los Angeles, and Orange County have resulted in pent-up demand in California’s primary housing markets. We think the persistence of this dynamic will benefit our communities in contrast with choppier demand trends in the national housing market. Operationally, our ongoing efforts to develop Newhall in Los Angeles County remain on track, and we continue to believe that we are positioned to generate revenue in that community sometime toward the end of 2019. In San Francisco, we are continuing to build infrastructure at Candlestick Point, consistent with our prior comments that this will be our main area of focus while the Navy continues retesting at Hunters Point. In the Great Park Neighborhoods, home buyer activity remains consistent with prior trends. From our perspective, a pronounced imbalance between levels of supply and demand across our markets is likely to persist into next year.”
