Howard Hughes Corp.does not already own for $117.5 million

Howard Hughes Corp. said Wednesday it is buying the remainder of The Woodlands development it does not already own for $117.5 million.

The Dallas-based company said it has a definitive agreement to purchase 47.5 percent interest in the master-planned community from Morgan Stanley Real Estate, which has owned a portion of The Woodlands since 1997.

CEO David Weinreb said the acquisition will allow the company to integrate the management expertise of The Woodlands with its other master-planned communities. He said the residents won't notice any change in the community and the team that operates it would remain in place.

"We'll be working on leveraging the best-of-class business that's already there and weaving it into our master-planned community business," Weinreb said.

In Houston, Howard Hughes Corp. also owns Bridgeland, a 11,400-acre master-planned community near Fry Road and U.S. 290 in northwest Harris County.

The 28,000-acre community north of Houston was developed in 1974 by George Mitchell. The billionaire oilman sold it in 1997 to Fort Worth-based Crescent Real Estate Equities and Morgan Stanley. It has been owned by two parties ever since.

Shopping center developer General Growth Properties owned it with Morgan Stanley up until last year. In November, Howard Hughes Corp. was spun out of General Growth as a publicly traded company.

Roger Galatas, who served as president of The Woodlands under George Mitchell, said the development is a market leader among other master-planned communities in the United States.

Located 27 miles north of downtown Houston along Interstate 45, the Woodlands has 97,000 residents and 1,700 employers. It has 1,372 acres of unsold residential land, representing 4,532 lots, and 936 acres of commercial land, according to the publicly traded Howard Hughes Corp.

The Woodlands' other assets include full or partial interests in commercial properties. They include 434,328 square feet of office space, 203,282 square feet of retail space and 865 apartments, as well as the 440-room Woodlands Resort & Conference Center and the Club at Carlton Woods, a 36-hole country club.

Howard Hughes Corp.'s board has approved the deal, which is expected to close July 1. The transaction consists of $20 million in cash payable at closing and $97.5 million non-interest bearing promissory note due Dec. 1, 2011.

At the end of the first quarter, The Woodlands had about $573 million of total assets, $332 million of third-party debt and $57 million of cash.

Susan Vreeland-Wendt, a spokeswoman for The Woodlands, said changes in ownership over the years have never affected the community or its local management.

The Woodlands master-planned community will soon have one owner. The Howard Hughes Corp. is buying the remaining interest in the development that the company does not already own.