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ARLINGTON, VA-Clark Realty has won a $300-million mandate from the Department of the Air Force to rehab existing housing communities that serve the Air Mobility Command East, or AMC East, which includes both MacDill Air Force Base in Tampa, FL and Andrews Air Force Base in Prince George's County, MD.
The mandate itself has a 50-year term; however, funding has only been secured for the first six-year phase, Sean Callahan, development executive with Clark Realty tells GlobeSt.com. The development budget for the first six years is $300 million, with $120 million slated to be spent at Andrews and $180 million at MacDill.
"We don't have firm numbers for the rest of the project; that will be decided based on availability of funding," Callahan says. "We do contemplate that, with the next 12 to 14 years we will have funds to do new renovation and new construction beyond the first phase of work."
The initial $300-million budget will be used for the demolition, replacement, renovation and management of an inventory of 1,458 homes at both installations. Design work will take about six to eight months to complete. Ground will break in fall 2008.
Clark Realty will manage the project's development, design, construction, and asset management. Interstate Realty Management will handle property management operations. Torti Gallas and Partners, an architect based in Silver Spring, MD, will provide design and land planning services. Merrill Lynch was the underwriter for the project and Duxbury Financial advised Clark Realty on the Project's capital structure.
This project is Clark Realty's first under the Air Force's Housing Privatization program, which was created in 1996 when Congress passed the Military Housing Privatization Initiative. Under this initiative, the developer bears the financial risk of the project through a 50-year land-lease from the Air Force. In return it collects service members' Basic Allowance for Housing as rent.
Clark Realty already has about 10 ongoing housing projects for the Army and Navy, in which some 25,000 housing units are being developed at an aggregate cost of $4.7 billion. The firm is hopeful that it will continue to add new mandates from the Air Force, Callahan says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
