800 residential unit project now in the architectural and engineering design phase
Advancing a variety of project-level funding options
SG Echo expected to generate $130M of inter-company revenue, as SG DevCo executes on strategy to expand the value of its asset base
Safe & Green Holdings Corp. (NASDAQ: SGBX) (“Safe & Green Holdings” or the “Company”), a leading developer, designer, and fabricator of modular structures for residential, commercial, and point-of-care medicine, today provided an update on its previously announced Magnolia Residential project, formerly known as McLean Residential.
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A rendering of the proposed Magnolia Residential Units (Photo: Business Wire)
The Company reports that its 800 residential unit project is now in the architectural and engineering design phase. In parallel, the Company is advancing a variety of funding options, including prospective development partnerships at the project level, as well as non-dilutive funding options. The Company also reiterated that SG Echo expects to generate $130 million of inter-company revenue from the project, while SG DevCo expects to benefit from a substantial increase in its asset base and future cash flow as a result of the development project.
The Magnolia Residential project primarily targets market-rate multi-family residential units and is located on McLean Avenue in Durant, OK, which is located in close proximity to the Company’s McLean factory (expected to commence manufacturing in 2023). The area is zoned to accommodate approximately 800 residential homes, predominantly one and two-bedroom units, ranging from approximately 700 to 1,200 square feet in size.
Paul Galvin, Chairman and CEO stated, “I am pleased to report SG DevCo is rapidly advancing the Magnolia Residential project and we are now developing the detailed site plan. We have received significant interest from potential limited partners to join us in this project, which we believe is further validation of the economic potential of this project and strong residential demand in the local market. Moreover, we are exploring a variety of non-dilutive funding options that would allow us to leverage the real estate and projected appraisal value of the project on completion.”
David Villarreal, CEO of SG DevCo, added, “We strongly believe that this project will address the need for residential units in the community. We are uniquely suited for these types of synergistic projects and are committed to providing the highest levels of quality, value and tenancy satisfaction for this and other communities, now and into the future.”
“Importantly, this project also validates the synergies of our SG Echo and SG DevCo subsidiaries. For SG Echo, we are able to utilize the available capacity and increase throughput in our factories to support large scale development projects, including our new McLean factory, which we expect to come online later this year,” continued Mr. Galvin. “For SG DevCo, we are able to support the project from conception through completion, without relying on third-party developers or contractors, thereby maximizing our return on capital. The progress we have made on Magnolia, combined with our other development projects, will also support our planned spinout of SG DevCo in Q3 2023, which we believe will create significant value for our shareholders. Furthermore, we are proud to bring both high paying both jobs as well as housing to the greater Durant, OK community.”
Nicolai Brune, Chief Financial Officer, SG DevCo commented, “We could not be more pleased with the progress of the Magnolia Residential project. Importantly, the project has remained on schedule and within budget, reinforcing our ability to execute on large scale development projects. Our strategy to leverage both our internal manufacturing capacity, as well as our development expertise, combined with the time and cost-benefits of our modular technologies, provides us a significant advantage in the marketplace."
About Safe & Green Holdings Corp.
Safe & Green Holdings Corp., a leading modular solutions company, operates under core capabilities which include the development, design, and fabrication of modular structures, meeting the demand for safe and green solutions across various industries. The firm supports third party and in-house developers, architects, builders and owners in achieving faster execution, greener construction, and buildings of higher value. The Company’s subsidiary, Safe and Green Development Corporation, is a leading real estate development company. Formed in 2021, it focuses on the development of sites using purpose built, prefabricated modules built from both wood and steel, sourced from one of Safe & Green Holdings’ factories and operated by the SG Echo subsidiary. For more information, visit www.safeandgreenholdings.com and follow us at @SGHcorp on Twitter.
Safe Harbor Statement
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. These forward-looking statements are based upon current estimates and assumptions and include statements regarding plans to construct roughly 800 units at the Magnolia Residential project for a total of approximately $130 million of manufacturing revenue for SG Echo; benefitting from a substantial increase in the asset base and future cash flow as a result of the development project; and advancing a variety of project-level funding options, including prospective development partnerships at the subsidiary level, as well as non-dilutive funding options. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to construct the Magnolia Residential project as planned, the Company’s ability to expand within various verticals as planned, the Company’s ability to position itself for future profitability, the Company’s ability to maintain compliance with the NASDAQ listing requirements, and the other factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and its subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.
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