Lendlease Corp. closed on the final phase of the Army’s Privatization of Army Lodging (PAL) program, securing $250 million in additional project debt, the international property and infrastructure group said Thursday.
The transaction brings the company’s total senior debt financing for the initiative to $715 million and allows it to add 2,058 hotel rooms located on Fort Lee, Va., and Fort Benning, Ga. Lendlease’s privatized hotel portfolio now stands at 12,492 hotel rooms on 41 military installations.
The $1 billion PAL program began in 2009, with Lendlease assuming ownership of hotel facilities on 10 Army posts. In 2010, the company was asked to implement the second phase of the program at an additional 11 posts. Lendlease was offered the third phase in October 2011. InterContinental Hotels Group (IHG), one of the world’s largest hotel groups, is the PAL hotel operator.
“Lendlease is honored to lead the Department of Defense’s only lodging privatization program,” Claire Johnston, managing director for communities, said in a press release. “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 Lendlease’s commitment to sustainability and innovation,” Johnston said.
By the end of the calendar year, Lendlease plans to deliver the nation’s first all-cross laminated timber hotel at Redstone Arsenal, Ala. The 58,850-square foot, four-story hotel will have 92 guestrooms; it will be operated under IHG’s Candlewood Suites brand.
To date, 14 Holiday Inn Express hotels have been delivered through the PAL program with another five currently under renovation. Lendlease also has delivered five new Candlewood Suites hotels with three under construction. One Staybridge Suites is under construction at Fort Belvoir, Va.
A list of IHG Army Hotels locations can be found on the project website.