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Lend Lease has achieved operational and financial closing on the final phase of the Department of the US Army's Privatization of Army Lodging (PAL) program.
The firm has secured a total amount of US$250 million in additional project debt, for a total of US$715 million in senior debt financing. This latest closing includes 2,058 hotel rooms located on Fort Lee, VA and Fort Benning, GA.
In August 2009, Lend Lease's public partnership business assumed ownership of over 3,200 hotel rooms located across 10 U.S. Army installations and, with InterContinental Hotels Group (IHG) as the hotel operator, became the first to begin operations under the PAL program, an Army-led, public-private venture established as a means of revitalizing on-post transient housing facilities for Soldiers, their families and all official government travelers.
In 2010, the Army asked Lend Lease to implement the second phase of the program to renovate, develop, operate, and sustain hotels at an additional 11 installations. In April 2013, Lend Lease closed the third phase of the program, bringing the total portfolio to more than 11,600 hotel rooms on 39 military installations throughout the U.S. and Puerto Rico. Today, Lend Lease's privatized hotel portfolio includes 12,492 hotel rooms on 41 military installations.
Claire Johnston, Managing Director, Communities, stated:
"Lend Lease is honored to lead the Department of Defense's only lodging privatization program. Leveraging the government's assets and raising private funds has resulted in exceptional lodging facilities that exceed the needs of today's military and government traveler and which deliver on Lend Lease's commitment to sustainability and innovation."
To date, 14 Holiday Inn Express® hotels have been delivered through the PAL program with another five currently under renovation. In addition, Lend Lease has delivered five new Candlewood Suites® hotels with three under construction. One Staybridge Suites® is under construction at Fort Belvoir, VA.
All excess revenue from the PAL program is reinvested back into the portfolio, ensuring the facilities will remain top-notch for decades to come.
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