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CALGARY, Alberta – (BUSINESS WIRE) – Westfalen Dev. Corp. (the “Group“Announced its results for the second quarter ended June 30, 2021 today. The company, which started in March 2012, acquired the 310 hectare Westphalia property (the “property or the “Project“) Based in Prince George’s County, Maryland, USA.
The company continues to actively seek buyers and developers for the remaining lots associated with Phase 2 and 3, as well as other more immediate opportunities associated with Phase 1 retail. The Company intends to renegotiate or refinance its senior debt with its lender WWMN, LLC and a potential new senior lender. The company’s main activities in the three months ended June 30, 2021 were as follows:
Continuation of construction on the Woodyard Road Interchange Project. The construction work is proceeding according to plan and is expected to be completed in June 2022.
Construction continues on the Presidential Parkway West project, which is expected to be completed by the third quarter of 2022.
Sales activities & financing
The company has signed and ratified a purchase and sale agreement with a leading national construction company for phases 1 and 2 of the project (picture below). The buyer’s due diligence is expected to be completed by October 12, 2021, with an expected external close date in the first quarter of 2023.
The company has entered into and executed a purchase and sale agreement with a national industrial construction and leasing company for large lots within the project, which is planned for future commercial industrial use in phases 2 and 3 of the project. The buyer’s due diligence is expected to be completed in December 2021, with external appointments expected in November 2022 (phase 3) and March 2023 (phase 2).
The company sought and worked with a potential prime lender for the project through its broker. The prospective senior lender continues to conduct its usual due diligence and documentation process, which must be completed prior to closing. This should be completed in the next 30 to 60 days. As a result, an extension of the term for the existing financing has been negotiated and implemented with WWMN, LLC, the senior secured lender, and the extended term is October 31, 2021. The company has also negotiated terms for subordinated financing from its existing lender WWMN, LLC, which is expected to have a portion funded at the same time as the new senior loan, and has received an unsecured loan from Walton Global Holdings, LLC that is to be repaid in full at the same time as the refinancing of the senior loan.
The single-family market in the Washington, DC statistical metropolitan area, and particularly in the Prince George’s County submarket, continues to show strength, which has led to increased interest among home builders in buying raw land to develop and build their own land.
Management continues to focus on strategies to maximize the project’s returns, including but not limited to:
A vertical strategy is being pursued at three other locations to collaborate with national or regional retail and senior housing builders. The company has hired an outside consultant to conduct a market analysis for these three locations that will assist the company and management with the next steps, which may include vertical construction and leasing, in partnership with the best third-party commercial, residential and / or third-party providers Senior housing company.
The company continues to work with the local community, the district management and internal staff to re-plan further development within the Westphalian city. The company continues to work with the various consultants to shift the scope of the project after the above contributions help by reducing the previously planned significant retail and office space and adding residential and other uses.
Second Quarter Financial Results
For the three months ended June 30, 2021, the company had revenue from contracts of $ nil (June 30, 2020 – $ 880,735). The cost of sales related to the property sales was $ zero (June 30, 2020 – $ 3,018,569), including sales charges and commissions.
For the three months ended June 30, 2021, the total loss was $ 205,089. Compared to the three months ended June 30, 2020 with a total loss of USD 2,269,927, there is a difference of USD 2,064,838 between the respective period ends. The deviation is due to the points discussed in detail in the Management Discussion & Analysis.
The company is owned by Walton Global Investments Ltd. and the development of the project is being led by Walton Development & Management (USA), Inc., both of which are members of Walton.
Walton is a privately held, leading global real estate investment, property management and management group that has focused on strategically located properties in key growth corridors for more than 42 years. Walton manages and manages $ 3.4 billion in real estate assets in North America on behalf of its investors and business partners. Walton owns, manages, and administers more than 98,000 acres of land in the United States and Canada. Walton’s key companies include Walton Global Holdings, Walton International Group, and Walton Development and Management. For more information, visit Walton.com.
This press release, which is required by Canadian law, does not constitute an offer of securities and is not intended for sale or distribution outside of Canada. This press release contains forward-looking information and actual future results could differ from those in this press release. Forward-looking information is based on the company’s current expectations, estimates and projections at the time the statements are made. They involve a number of known and unknown risks and uncertainties that could cause actual results or events to differ materially from those currently expected. Risks, uncertainties and other factors that could cause actual results and performance of the company in future periods to differ materially from the forward-looking information contained in this press release include, but are not limited to, the development of downtown Westphalia, general economic and business developments Market factors, including interest rates, a decline in the property market, changes in government policies and regulations or tax laws, changes in local government planning strategies and whether certain building permits will be granted, and changes in the Canadian / US dollar exchange rate, in addition to these factors discussed in documents or referenced, filed with the Canadian Securities and Exchange Commission and available online at www.sedar.com.
Unless otherwise stated, all amounts are in Canadian dollars and are based on the unaudited condensed consolidated interim financial statements for the three months ended June 30, 2021 and the accompanying notes, prepared in accordance with International Financial Reporting Standards.
Source: Westfalen Dev. Corp.