CALGARY, Alberta–(BUSINESS WIRE)–Walton Westphalia Development Corporation (the “Corporation”) announced
today its results for the first quarter of 2019. Launched in March 2012,
the Corporation was formed to provide investors with the opportunity to
participate in the acquisition and development of the 310-acre
Westphalia Property (the “Property or the “Project”) located in Prince
George’s County, Maryland, United States of America.
2019 Highlights
During the period ended March 31, 2019, the Corporation continued to
negotiate the terms of the sales contract for the bulk sale of Phase 1A
lands and marketing the opportunities available in Phases 2 and 3. The
key activities undertaken by the Corporation were as follows:
Construction Activities
-
Continued the construction of the second phase of the Westphalia Green
central park; - Completed installation of the dry utility conduit in Blocks F and G;
-
Continued installation of privately maintained lighting located within
the alley areas; -
Contracted with a new landscape contractor for the remainder of the
park; -
Continued with the design of the Pennsylvania Avenue / Woodyard Road
interchange including obtaining contractor bids for the construction.
Financing Activities
-
The Corporation received $1,642,908 as reimbursement from Tax
increment financing (“TIF”) bonds for money spent on planning,
design, and permitting associated with the design and construction of
Presidential Parkway, and the MD4/MD223 interchange.
Sales Activities
-
The Corporation has entered into a conditional purchase and sale
agreement for a bulk sale of the Phase 1A lands. The purchaser waived
due diligence on January 29, 2019. The Corporation and the purchaser
continued to work through conditions precedent as well as negotiated
necessary reciprocal easement agreements.
The single-family market in the Washington, D.C. metropolitan
statistical area (“MSA”), and specifically in the Prince George’s
County submarket, continues to be strong. The Project has received
commitments to sell 346 lots to three homebuilders, NVR, Inc. (144
lots), Mid-Atlantic Builders (99 lots) and Haverford Homes (103 lots).
As of May 15, 2019 NVR, Inc. had closed on all 144 lots, Haverford Homes
had closed on 91 lots, and Mid-Atlantic Builders had closed on 75 lots.
NVR reported 144 home sales (contracts with future homeowners),
Haverford reported 90 home sales, and Mid-Atlantic reported 78 home
sales. There have been 241 occupancies; 122 for NVR, 69 for Haverford,
and 50 for Mid-Atlantic.
Management continues to focus on strategies to maximize the returns of
the project, which include, but are not limited to:
-
Kimco, our retail joint venture partner, has received a fully executed
LOI for a grocer tenant. Discussions and negotiations are ongoing with
the goal of converting the LOI into a fully executed ground lease.
Many smaller retailers have expressed interest in both in-line stores
and individual pad sites. The Development Feasibility period for Kimco
ends on July 1, 2019. -
The Corporation continues to receive additional interest in the
parcels associated with Phases 2 and 3. The Corporation continues to
evaluate letters of intent for the purchase of, or joint venture in,
Phase 2 and 3.
First Quarter Financial Results
During the three months ended March 31, 2019 and March 31, 2018, the
Corporation recognized revenue on contracts of $3,909,747 and
$2,145,287, respectively, from single family lot sales in Phase 1. The
cost of sales relating to the lot sales was $3,958,927 and $2,176,737,
respectively, with $49,180 and $31,450, respectively, relating to
selling costs and commissions. The revenue and cost of sales recognized
for the years ended March 31, 2019 and 2018 was in respect to the sale
of 36 and 23 Phase 1 single family lots to home builders, respectively.
Total other expenses increased by $43,191 from $263,097 for the three
months ended March 31, 2018 to $306,288 for the three months ended March
31, 2019. The increase is primarily due to an increase in financing
costs of $74,373, an increase in marketing expenses of $15,943, and an
increase in professional fees of $8,733. This is offset by a reduction
in servicing fees of $34,493, and an increase in interest income of
$20,667.
For the three months ended March 31, 2019 total other items consists of
a foreign exchange loss amounting to $538,361. When compared to the
three months ended March 31, 2018 gain of $687,032, there is a variance
of $1,286,314 in total other items. As the Canadian dollar has
strengthened, the underlying Canadian dollar intercompany debentures and
intercompany debt contracts in the U.S. Subsidiary reflected a foreign
exchange loss.
For the three months ended March 31, 2019, comprehensive loss was
$290,198. When compared to the three months ended March 31, 2018 loss of
$55,920, there is a variance of $234,278 between the respective period
ends. The variance is due to the items discussed above as well as a
$1,052,036 change in other comprehensive gain due to changes in the
cumulative translation losses recorded on the translation of the U.S.
Subsidiary accounts from a functional currency of U.S. dollars to
Canadian dollars for reporting purposes.
Additional Information
The Corporation is managed by Walton Global Investment Ltd and the
development of the project is managed by Walton Development & Management
(USA), Inc., both of which are members of the Walton Group of Companies.
The Walton Group of Companies (“Walton”) is a multinational real estate
investment, planning, and development group concentrating on the
research, acquisition, administration, planning and development of
strategically located land in major North American growth corridors.
Its communities are comprehensively designed in collaboration with local
residents for the benefit of community stakeholders. Its goal is to
build communities that will stand the test of time: hometowns for
present and future generations.
For more information about Walton Westphalia Development Corporation,
please visit www.sedar.com.
For more information about Walton, visit www.Walton.com.
This news release, required by Canadian laws, does not constitute an
offer of securities, and is not for distribution or dissemination
outside Canada. This news release contains forward looking information,
and actual future results may differ from what is disclosed in this news
release. Forward-looking information is based on the current
expectations, estimates and projections of the Corporation at the time
the statements are made. They involve a number of known and unknown
risks and uncertainties which would cause actual results or events to
differ materially from those presently anticipated. The risks,
uncertainties and other factors that could cause the Corporation’s
actual results and performance in future periods to differ
materially from the forward looking information contained in this news
release include, among other things, renegotiation of loans, refinancing
or extension of the existing loans, the amount and timing of the
financing received, the amount of, timing and terms of any tax increment
financing that may be received by the Corporation, the length of time it
takes to develop and sell the Property, the ability of the Corporation
to enter into joint ventures relating to, or to otherwise, vertically
develop portions of the Property, the availability and terms of other
construction financing required by the Corporation, the costs involved
in the horizontal and/or vertical development of the Property, the
prices at which the serviced lots and parcels from, or vertically
developed structures on, the Property can be sold, the rate at which
serviced lots and parcels from, or vertically developed structures on,
the Property are purchased in the marketplace, general economic and
market factors, including interest rates, a decline in the real estate
market, changes in government policies and regulations or in tax laws,
changes in municipal planning strategies and whether certain development
approvals are obtained and changes in the Canadian/U.S. dollar exchange
rate, in addition to those factors discussed or referenced in the
prospectus and other documents filed with Canadian securities regulatory
authorities and available online at www.sedar.com.
Except as otherwise noted, all amounts are in Canadian dollars, and
are based on unaudited condensed interim consolidated financial
statements for the three months ended March 31, 2019 and related notes,
prepared in accordance with International Financial Reporting Standards.
Contacts
For media inquiries, please contact: Camila Roncancio
Office:
1.866.925.8668
Email: [email protected]
