Westphalia Dev. Corp. (the “Corporation”) announced today its results for the first quarter ended March 31, 2021. Launched in March 2012, the Corporation acquired for development the 310-acre Westphalia Property (the “Property or the “Project”) located in Prince George’s County, Maryland, United States.
Review of Operations
The Corporation continues to actively seek purchasers and developers for the lands associated with Phases 2 and 3 as well as other more immediate opportunities associated with the Phase 1 retail and residential lands. The Corporation intends to renegotiate or refinance its senior debt with its lender, WWMN, LLC. The key activities undertaken by the Corporation during the three-months ended March 31, 2021, were as follows:
- Continued construction on the Woodyard Road Interchange project.
- Continued construction on the Presidential Parkway East project.
- Continued to negotiate two purchase and sale agreements.
The single-family market in the Washington, D.C. metropolitan statistical area, and specifically in the Prince George’s County submarket, continues to show strength which has led to increased builders’ interest in purchasing raw land for the development and construction of their own lots.
Management remains focused on strategies to maximize the returns of the Project, which include, but are not limited to:
- The Corporation has engaged a leading Real Estate services and mortgage firm to assist in the refinancing of its senior loan.
- The Corporation continues to have discussions with a regional retail developer to develop the retail portion near the entrance of the project at the Woodyard Road Interchange; however, the impacts of COVID-19 have directly impacted the retail market in general.
- The Corporation is in discussions with a broker to help identify other possible retail partners while continuing to work on agreements with interested regional developers. The Corporation is evaluating a proposal for retail development services from the broker who would serve as a retail development partner.
- The Corporation finalizing agreements with a developer and national publicly traded homebuilder to develop land associated with the residual Phase 1 residential lands, as well as Phase 2 and 3.
- The Corporation continues to work with the local community, County leadership, and internal staff to re-plan additional development within the Westphalia Town Center.
- The Corporation also continues to work with the various consultants to implement a shift in the project’s scope after having received input from those detailed above by reducing the significant retail and office space that had been previously planned and adding residential and other uses.
First Quarter Financial Results
During the three months ended March 31, 2021, the Corporation recognized revenue on contracts of $nil (March 31, 2020 – $17,133,027). The cost of sales relating to the lot sales was $nil (March 31, 2020 – $17,242,797), including selling costs and commissions.
For the three months ended March 31, 2021, the total comprehensive loss was $219,697. When compared to the three months ended March 31, 2020 total comprehensive loss of $683,953, there is a variance of $464,256 between the respective period ends. The variance is due to the items discussed in detail in the Management Discussion & Analysis.
The Corporation is managed by Walton Global Investments Ltd. and the development of the project is managed by Walton Development & Management (USA), Inc., both of which are members of Walton.