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NEWTOWN SQUARE, PA-GMH Communities Trust’s military housing division has finalized agreements with the Department of the Air Force under which GMH becomes the private sector developer for the 50-year Air Education and Training Command Group 1 military housing privatization project. It encompasses 2,875 housing units at four bases.

The agreement begins with a five-year initial development period that includes the design, construction and/or renovation of the 2,875 units located at Atlus Air Force Base in Atlus, OK; Luke Air Force Base in Glendale, AZ; Sheppard Air Force Base in Wichita Falls, TX; and Tyndall Air Force Base in Panama City, FL. GMH also assumes overall management, maintenance and operational responsibilities for the housing in those locations for the full 50 years.

Approximately $337.1 million will be expended over the five-year initial development period. That funding, a spokeswoman for GMH says, “comes from a combination of private debt, subordinated Air Force debt, private equity, interest earnings and excess cash flow. Although we begin construction and renovation immediately, not all of the funding is spent immediately, which accounts for the interest earnings.

“Our earnings come from property management fees, development fees and return on invested capital. The Air Force’s basic allowance for housing to military residents goes back into the project over the term of the agreement. Throughout the 50-year term, we are constantly renovating and replacing the housing as well as the roads, community centers and other amenities, in the same way a private multihousing complex would be maintained and operated.

“Each of the communities will be different,” she tells GlobeSt.com. “Each is designed to fit with the surrounding communities. The Luke base community, for example, is designed to fit with Arizona architecture and landscape.”

This is locally based GMH’s 10th military housing privatization project and its first for the Air Force. “We have a long-term commitment to be a leading provider of quality housing for the US military service members and their families, and we’re thrilled with the opportunity to partner with the Department of the Air Force for the first time,” says Bruce Robinson, president of the GMH military housing division, in a statement.

GMH is utilizing its alliances with the Oklahoma City-based Benham Cos. Inc. architectural and engineering firm and Greeley, CO-based Hensel Phelps Construction Co. for the project. All 10 of the GMH projects come under the Military Housing Privatization Initiative, which was authorized by Congress in 1996.

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