Lend Lease Reaches Financial Close on Third Phase of the U.S. Army Lodging Privatization Program
Public-private community developer secures $465 million for additional development, renovation of U.S. Army guest lodging
NEW YORK, May 1, 2013 /PRNewswire/ -- Lend Lease, an infrastructure and property solutions provider and leader in public-private community development, has reached financial close on the third phase of the Department of the Army's Privatization of Army Lodging (PAL) program, and secured $465 million in project debt to continue delivering hotels for Service members, their Families and all government travelers through the Program. This latest project includes approximately 3,800 hotel rooms on 18 military installations throughout the United States. Over the next eight years, Lend Lease will deliver 1,018 new Candlewood Suites® brand hotel rooms to these installations and renovate an additional 2,745 hotel rooms to Holiday Inn Express® brand standards. In total, through all three phases, the circa $1.0 billion PAL program will have resulted in the development and/or renovation of over 11,000 rooms across 39 military installations nationwide.
Selected through a competitive process as the developer for the only Department of Defense lodging privatization program, Lend Lease is the exclusive asset manager, developer and design builder for the Army's entire lodging portfolio. InterContinental Hotels Group (IHG), one of the world's largest hotel groups, is the PAL hotel operator.
"Since the Privatization of Army Lodging program's inception, Lend Lease has delivered exceptional results and demonstrated a deep understanding of the program's mission," said Rhonda Hayes, Chief, Capital Ventures Directorate of the Office of the Assistant Secretary of the Army, Installations, Energy & Environment. "The results speak for themselves, with new and renovated branded hotels that offer Service members and their Families the lodging experience that they both desire and deserve, and at a cost that is less than the government lodging per diem. The knowledge and expertise that Lend Lease and IHG bring to the PAL program not only validates their positions as industry leaders, but also remains key to the initiative's long-term success."
PAL debuted in 2009, with Lend Lease assuming ownership of on-post hotel facilities at 10 installations. In 2010, the company was asked to implement the second phase of the program to renovate, develop, operate and sustain hotels at an additional 11 installations. Lend Lease was offered the third phase of the PAL program in October 2011.
Throughout the current PAL portfolio, existing facilities are receiving extensive renovations and upgrades to include bringing select hotels up to the standards required to operate under the Holiday Inn Express® brand. To date, Lend Lease has delivered six Holiday Inn Express® hotels, a combined 1,277 Holiday Inn Express® brand rooms. In addition, there are currently five Candlewood Suites® hotels under construction, including a 310-room Candlewood Suites® on Joint Base San Antonio that, once complete, will be the largest in the world.
"Lend Lease is proud to continue delivering the Privatization of Army Lodging program," said Marc Sierra, Lend Lease (US) Public Partnerships Managing Director. "By leveraging the government's assets and raising private funds, we are truly creating the new standard in on-post hotels."
A 2003 internal Army lodging study found that more than 80% of the existing lodging inventory needed to be recapitalized, costing the government more than $1.2 billion and taking 20 years to complete. The PAL program saves Army travel dollars by offering official travelers rooms at a 25% discount to lodging per diem costs. Lend Lease will assume responsibility of the hotels until 2059. All hotel revenue after the payment of operating expenses is required to be spent on construction, renovation and sustainment costs to ensure quality hotels today and in the years ahead.
Operating under the name IHG Army Hotels, guests enjoy new and enhanced services and amenities, including complimentary breakfast, concierge services, weekly social activities, courtesy shuttles, and the opportunity to earn points for their stays with IHG's Priority Club® Rewards, soon to be renamed IHG® Rewards Club this July, guest loyalty program. To date, IHG Army Hotels has awarded more than 447 million points to Service members for use in off-post hotels nationwide. Hotel reservations can be made on-line at www.ihgarmyhotels.com.
About Lend Lease
Lend Lease is a leading international property and infrastructure group. Listed on the Australian Securities Exchange and with circa 19,000 employees worldwide, the firm's capabilities span the property and infrastructure spectrum.
In the US, Lend Lease's public partnership business is the nation's leader in public/private community development. With a focus on creating sustainable value, Lend Lease creates communities that regenerate our environment, enrich people's lives and foster economic growth. Lend Lease has worked extensively with the Department of Defense through the Military Housing Privatization Initiative (MHPI), a program that provides for the transfer of military housing assets to private sector companies. With over 40,000 residential units, 192 apartments and more than 11,600 hotel rooms in its portfolio, Lend Lease will finance, develop, build, renovate and operate these sites for at least 50 years.
We create innovative and sustainable property solutions, forging partnerships and delivering maximum benefits to clients, investors and communities. Safety is our number one priority and Lend Lease is committed to operating Incident & Injury Free wherever we have a presence.
SOURCE Lend Lease
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