In a press release issued Monday, Balfour Beatty Communities (formerly GMH Military Housing) announced that it has completed the purchase of interests previously held by American Eagle Communities in the U.S. Department of the Army’s Fort Leonard Wood Military Housing Privatization Project located in Pulaski County.
As part of the transaction, the company has acquired the outstanding equity interests of American Eagle for an aggregate purchase price of $3.25 million, and also assumed the existing agreements for property management, development, and construction/renovation relating to the project.
Along with the closing of the acquisition, Balfour Beatty Communities assisted the project company in successfully restructuring the project scope through negotiations with the Army and existing bondholders. Restructuring was necessary to account for changes in market conditions affecting occupancy rates for the project, and resulted in a reduction of end-state housing units from 2,242 to 1,806. In addition, the project company completed a special redemption of approximately $79.5 million in outstanding bonds that were issued as part of the financing based on the original scope of the project.
The project has a 50-year term, the remainder of which extends through April 2054, and includes a remaining initial development period that ends in April 2014. Under the revised project scope, remaining initial development costs are valued in excess of $80.7 million, for a total of approximately $201.9 million in costs associated with the project as a whole. Under the terms of restructuring, the project consists of the new construction of a total of 472 homes (461 of which already have been completed), one community center and two neighborhood centers, major and minor renovations of 537 homes, and the conversion of an additional 503 homes.
“We are very pleased to have completed the acquisition of interests in the Fort Leonard Wood project, as well as having successfully assisted the Army in the restructuring in order to ensure the ongoing stability of the project. This transaction represents not only an opportunity for Balfour Beatty Communities to expand its military housing portfolio through the acquisition of existing projects, but also exemplifies our proven ability to design and implement effective financing throughout our project portfolio.
“Our first priority in assuming operations for the project is to maintain the well-being and comfort of the current residents,” stated Bruce Robinson, President and Chief Executive Officer of Balfour Beatty Communities. “We look forward to serving the soldiers and their families on base, and are extremely honored to join with the Army on this project in order to continue existing efforts to improve family housing at Fort Leonard Wood.”
Congressionally authorized since 1996, the Military Housing Privatization Initiative allows the Department of Defense, and the Department of the Army — via its Residential Communities Initiative (RCI), Office of the Assistant Secretary of the Army for Installations and Environment — to work with the private sector to upgrade the quality of family housing, and operate and maintain that housing. The family housing assets are typically leveraged with private investment to accomplish housing construction and renovation goals faster and at a lower cost than military construction.
Including the acquisition of the Fort Leonard Wood project, Balfour Beatty Communities, LLC operates 13 military housing privatization projects covering family housing at 38 military bases, including one unaccompanied personnel project; and is in exclusive negotiations relating to three additional family housing projects representing an additional five military bases, as well as one unaccompanied personnel housing project. The company previously has partnered with the Department of the Army for the military family housing privatization projects at:
• Fort Stewart, Hinesville, Ga., and Hunter Army Airfield, Savannah, Ga.
• Walter Reed Army Medical Center, Washington, D.C. and Fort Detrick, Frederick, Md.
• Fort Hamilton, Brooklyn, N.Y.
• Fort Carson, Colorado Springs, Colo.
• Fort Gordon, Augusta, Ga.
• Carlisle Barracks, Carlisle, Pa., and Picatinny Arsenal, Dover, N.J.
• Fort Eustis, Newport News, Va., and Fort Story, Virginia Beach, Va.
• Fort Bliss, El Paso, Texas and White Sands Missile Range, Las Cruces, N.M.

The company has partnered with the Department of the Navy for its Navy Northeast Region Project, covering eight naval bases in Maine, Rhode Island, Connecticut, New York and New Jersey, as well as the Navy Southeast Region Project covering 11 naval bases in South Carolina, Florida, Georgia, Mississippi, and Texas. The company has also partnered with the Department of the Air Force for Vandenberg Air Force Base, Lompoc, Cali., and the Air Education and Training Command (AETC) Group I Project consisting of four Air Force bases located at:
• Altus Air Force Base, Altus, Okla.
• Luke Air Force Base, Glendale, Ariz.
• Sheppard Air Force Base, Wichita Falls, Texas
• Tyndall Air Force Base, Panama City, Fla.

Balfour Beatty Communities has partnered with the Department of the Army for the privatization of Unaccompanied Officer Quarters/Unaccompanied Senior Enlisted Quarters at Fort Stewart, Hinesville, Ga.
Balfour Beatty Communities, LLC (formerly known as GMH Military Housing) is responsible for the development, renovation, operation and management of military privatization housing projects for the U.S. Departments of the Army, Navy and Air Force. The company has been a leader in the military housing industry, and provides services to members of the U.S. military and their families residing on or near bases located in 21 states across the country. Currently based in Newtown Square, Pa., the company employs approximately 1,000 people nationwide.