NWPI Revenue Stream
The revenue received by NWPI from the Project will either come from residential plots being sold to a developer or from commercial space being leased to long-term tenants.
Residential
Immediately following completion of the DRI and rezoning, management will seek to sell all of the approximately 3,400 residential plots to a large, established, residential developer. While all residential plots will be sold at the same time for a projected $20,000 per plot (avg. 3.3 plots per acre), NWPI does not anticipate receiving all residential revenue in one lump sum. Rather, management projects being paid quarterly in 20 equal installments. These installments will likely be composed of both cash (50%) and equity (50%) in the partner/developer. Strategically, the cash/equity balance will help promote a healthy long-term working relationship between NWPI and their developer/partner - a relationship likely to result in future opportunities for NWPI.
The financial model is conservative in that it does not take into account the potential tax benefits of IRS Section 1031. IRS Section 1031 allows a business to defer the tax liability associated with a property sale by reinvesting the proceeds into another piece of property.
Commercial
Unlike the residential acreage, which management intends to sell off in its entirety, commercial/industrial acreage will be held indefinitely to create an almost never-ending stream of recurring revenue.
Pre-leases on commercial/industrial square footage will begin towards the end of the DRI/Rezoning process. While it is extremely difficult to project commercial/industrial lease rates on NWPI because there are no true comparables, management anticipates staggered lease rates of $8/sq ft, $10/sq ft, and $12/sq ft for leases starting October 2002 - September 2004, October 2004 - September 2006, and October 2006 - December 2009 respectively. For the purposes of financial projections, leases are assumed to be long-term (greater than 10 years).
