CALGARY, Alberta--(BUSINESS WIRE)--Walton Big Lake Development L.P. (the “Partnership”), and its general partner, Walton Big Lake Development Corporation (the “General Partner”), announced today the Partnership’s financial results for the second quarter of 2019. Launched in 2010, the Partnership owns a residential project in northwest Edmonton, Alberta. The project is being developed in three phases over a fifteen-year time frame and marketed under the name “Hawks Ridge at Big Lake”, (the “Project”).
Project Debt Update
The forbearance periods on the Phase 2 Facility and Second Mortgage Loan have expired. The Partnership has not been provided with any further notices of default and the lenders have confirmed that they intend to take no action as a result of the expired forbearance periods.
The Partnership has been reliant on Walton Global Investments Ltd. (“WGIL”) funding monthly interest payments, which WGIL has continued to do even after the expiry of the forbearance period up to and including the most recent interest payment on August 1, 2019 but there is no guarantee that this financing will continue. The Partnership continues to work with its lenders on strategies that result in repayment of debt including but not limited to continuing development of the Project.
Second Quarter Highlights
During the period ended June 30, 2019, the key activities undertaken by the Partnership were as follows:
- CCC inspections have been approved for Phase 1 Walkways, Phase 1 Boardwalk Bridge, Phase 2 On-site Storm and Sanitary Sewers, Phase 2 Surface, Off-site Storm Water Management Facility, and Off-site Creek Landscaping;
- CCC inspections were requested for Phase 2 Boulevards and Walkways, Phase 2 Lift Station, Off-site 215th Street Boulevard Landscaping, Off-site 215th Street Wildlife Passage Landscaping, and Off-site Storm Water Management Facility Landscaping;
- Presented Purchase and Sale Agreements (“PSAs”) for 3 semi-estate RSL lots to home builders. Management expects the signed agreements, with a 20% non-refundable deposit, to be returned in August 2019. The remainder of the sales proceeds will be received by the earlier of the sale of the home or August 2020 which is the point at which the Partnership would recognise the sale.
The historical pace of sales and current sales activity is well behind the original targeted sales pace for the Project. Given management believes there will be continued muted demand for new housing in Edmonton, management anticipates pricing discounts on current and future lots may be necessary in order to capture market share and increase existing sales velocity or, if the existing project debt can be restructured and additional construction financing obtained, obtain new builder commitments on future inventory.
Management will continue to provide regular updates on market conditions and project performance based on the key economic indicators for Edmonton.
Second Quarter Financial Results
During the three and six month periods ended June 30, 2019, the Partnership generated revenue of $nil (June 30, 2018 – $nil) and $197,766 (June 30, 2018 - $nil), respectively, and also recorded cost of sales of $nil (June 30, 2018 - $nil) and $197,766 (June 30, 2018 - $nil), respectively. The revenue and cost of sales recognized in 2019 was in respect to the sale of one Phase 2A single family lot, to a home builder. Pursuant to the terms of the purchase and sales agreements for the lots, final payment from the purchaser is typically due 365 days after receipt of the second deposit, but varies based on negotiated terms including market conditions, pricing and absorption factors. Due to the current state of the new home building market in Edmonton, builders are pushing for discounts on existing lots in order to move product and asking for concessions in terms of reduced pricing and extended terms to enter new commitments. The Partnership generated a net and comprehensive loss for the three and six month periods ended June 30, 2019 of $694,633 (June 30, 2018 – loss of $571,497) and $1,293,503 (June 30, 2018 – loss of $1,107,150), respectively. The losses were driven by other expenses as detailed in the Management Discussion and Analysis (“MD&A”).
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 Big Lake Development L.P., please visit www.sedar.com. For more information about Walton, visit www.Walton.com. For information about Hawks Ridge at Big Lake visit www.hawksridge.ca.
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. The risks, uncertainties and other factors that could influence results are described 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 financial statements for the six months ended June 30, 2019 and related notes, prepared in accordance with International Financial Reporting Standards.