GlobeSt.com UPDATE: GMH Inks $600M Largest-Ever Navy Housing Deal

In all, the contract involves more than 5,600 Navy-owned family housing units in 13 communities in five states. The proposed development scope of the agreement is valued in excess of $600 million, approximately $29 million more than GMH's CEO, Gary Holloway, revealed to GlobeSt.com on Oct. 28, the day GMH went public on the NYSE. Initially, it calls for the demolition of approximately 1,914 existing housing units and replacement or renovation of more than 2,400 units. In addition, GMH will create amenities for residents, including recreational areas and community centers.

The eight project locations are: Naval Air Station Brunswick in Brunswick, ME; Naval Shipyard Portsmouth in Kittery, ME; Naval Station Newport in Newport, RI; Naval Submarine Base New London in Groton, CT and that facility's Navy housing complex in Fairfield, CT; Naval Support Unit Saratoga Springs in Saratoga Springs, NY; Naval Weapons Station Earle in Colts Neck, NJ; Naval Air Engineering Center Lakehurst in Lakehurst, NJ; and Naval Housing Complex Mitchell Manor and Mitchell Field in Long Island, NY.

The GMH military housing entity formed for this project is a joint venture between Benham Companies Inc. and GMH Housing Military Investments LLC, which is also a subsidiary of GMH Communities Trust. GMH has an existing alliance with Benham, an Oklahoma City-based architectural and engineering company, and with Dallas-based Centex Construction Co., a homebuilder, which will provide construction services for the project.

In 1996, Congress authorized the Department of Defense to allow the military services to work with the private sector to upgrade, operate and maintain its family housing stock. Under this initiative Navy family housing assets are leveraged with private investment to accomplish housing construction goals faster and at a lower cost than military construction. Bruce Robinson, president of GMH's military housing division, says this fifth GMH contract demonstrates "our ability to leverage our organization's core competencies to provide service member families with quality, self-sustaining homes."

By midday Nov. 5, the day the Navy contract was announced, shares of GMH stock, which trades under the call letters GCT, broke loose from the $12-per-share level where they had languished since the IPO, and rose more than 56 cents a share.