Five Point: New Management Team Refocusing California Land Developer

Bob Robotti of Robotti & Company Advisors discussed his investment thesis on Five Point Holdings (US: FPH) at Best Ideas 2025.

Thesis summary:

Five Point Holdings is a land development company formed by Lennar in 2016 to combine three strategic California-based land development investments. FPH owns 30,000+ entitled housing sites in supply-constrained markets that will be sold to homebuilders and commercial developers.

Five Point’s land assets represent a significant portion of the real estate available for development in Los Angeles County, San Francisco County, and Orange County, three of the most dynamic, supply-constrained markets in California:

• Great Park, located in Irvine, California, is ~80% complete and generating significant free cash flow.
• Valencia, located north of Los Angeles County, is one of the largest master planned communities in the state. Less than 10% of the 21,500 homesites have been sold, leaving more than a decade of runway.
• Candlestick / SF Shipyard, located in San Francisco, is a one-of-a-kind blank canvass master planned community with entitlements for over 12,000 homesites and over six million square feet of commercial space.

A new management team has paid down/refinanced debt while shifting focus to controlling costs and generating free cash flow through market cycles.

Bob believes that the value of Five Point’s Great Park Community equals the current value of the entire enterprise and fails to ascribe value to Valencia and the San Francisco venture — both very valuable assets.

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About the instructor:

Bob Robotti is the Founder, President and CIO of Robotti & Company Advisors, a registered investment advisor based in New York City.

Guided by the classic tenets of value investing, VALUATION MATTERS. Robotti & Company Advisors uses a proprietary research approach to identify companies which trade for substantial discounts to their future free cash flows, yet are misunderstood, neglected, or just out-of-favor, so discounted by markets. Once identified, Robotti’s investment team focuses on deep primary industry and company research to select investment holdings through the lens of a long-term business owner.

In this capacity, Bob is currently on the boards of AMREP Corporation (NYSE:AXR), Pulse Seismic Data Inc. (TSX: PSD) for which he also serves as Chairman, and Tidewater, Inc. (NYSE:TDW). Bob previously was on the board BMC Building Materials Holding Corporation, now amalgamated into Builders FirstSource, the premier and differentiated distributor of building structural products to homebuilders.

Prior to founding Robotti & Company in 1983, he was the CFO of Gabelli & Company. Bob holds a BS in Accounting from Bucknell University and an MBA from Pace University.