GMH Military Housing Division Bought by Balfour Beatty
- May 01, 2008
Balfour Beatty Group has completed acquisition of the military housing division of GMH Communities Trust for $350 million, it has reported. The student division of GMH Communities is in negotiations to be acquired by American Campus Communities. The military division has been renamed Balfour Beatty Communities. This deal allows Balfour Beatty to expand its already extensive presence in the multi-family housing, especially in the United States defense industry. The new entity, Balfour Beatty Communities, based in Newtown, Penn., now provides, jointly with the U.S. Department of Defense, approximately 25,700 military housing units for families on 12 military housing projects in 37 military bases throughout the United States. The company employs about 1,000 people nationwide, and both the management team and the employees are expected to remain primarily unchanged. As reported previously in CPN, the publicly traded REIT announced in March its plans to sell both divisions for an anticipated total of about $1.8 billion.”I think it’s exciting for numerous reasons, the first being that we had an international company seek us out to make an offer, which is an indication how far our reputation and our successes had traveled,” Bruce Robinson, president & CEO of Balfour Beatty Communities told CPN. “We will now have much greater capitalization available to us, to pursue other opportunities in different areas.”Some opportunities of public-private partnership sectors include health and school systems, utilities infrastructure and roadway and airport projects, he noted. For example, he advised that the governor of Pennsylvania would like to privatize the Pennsylvania turnpike–to improve it and to use the money derived from the sale to improve other roads and bridges that are in disrepair. Balfour Beatty in the United Kingdom has been partnering successfully in such deals for the last ten years. “Now the Balfour Beatty Group generates about 20 percent of its revenues, which total about $16 billion – in non-construction-related projects. (We) are looking to use us as a platform in the United States for this kind of private-public venture, and to substantially grow our revenues.” Balfour Beatty Group is also working on other defense related developments that include the Pentagon’s 9/11 Memorial Building, as well as services for both the Army Corps of Engineers and the Department of Veteran Affairs’ health care facilities in United States, Puerto Rico, and Germany. The company has also been involved in the U.S. Capitol Visitor Center, several National Archives and Records Facilities, project management for border stations for the General Services Administration (GSA) in both Arizona and Washington , and for several Federal Bureau of Investigation buildings.GMH Communities Trust trades on the New York Stock Exchange. After the planned sale of the student housing division to American Campus, shareholders will be redeemed, mainly in cash and some stock. The Balfour Beatty Communities is a subsidiary of the U.K. company, Balfour Beatty plc, and trades on the London Stock Exchange.