The Michaels Organization Announces $500 Million Investment in Military Housing

Presidio of Monterey ● Photo Credit: The Michaels Organization

CAMDEN, N.J., March 8, 2024 (VSNewsNetwork.com) - The Michaels Organization, a residential real estate company, has announced a significant investment exceeding $500 million into its military housing portfolio across seven Army installations. This investment, the largest since partnering with the U.S. Department of Defense, aims to fund the development of new homes, renovations of existing and historic homes, infrastructure improvements, and new amenities.

According to a company press release, This extensive reinvestment plan will be financed through existing project reinvestment funds and a pioneering $305 million bond issuance, which achieved financial closing on March 6, 2024. This marks a significant milestone facilitated by a collaboration of financiers, attorneys, and investors.

Erik Roberson, Senior Vice President of Investment Management at Michaels, led the initiative and expressed his enthusiasm for the project. "It is a massive honor to be entrusted with the responsibility of building the homes and communities where our service members call home. For us to truly deliver upon that responsibility requires the support of many, and it is uplifting to see so many willing to invest their time and money in improving the quality of life for our service members of both today and tomorrow. We extend our deepest thanks to all involved and are beyond excited for what this means in advancing the places our service members live, work, and play,” said Roberson.

The development plan, in collaboration with Army leadership, will enhance housing at several installations, including Fort Belvoir and Fort Leavenworth, among others. These improvements aim to significantly elevate living conditions for service members and their families.

John J. O’Donnell, CEO of The Michaels Organization, also commented on the initiative: “We consider it an incredible privilege to house heroes and serve their families. We thank the U.S. Department of Defense for their continued trust in us as well as our partners at Stifel, whose expertise was critical to the success of our bond issuance," said O’Donnell.

The bond issuance team comprised Stifel and Ballard Spahr LLP, with Michael Sklar of Levine, Staller, Sklar, Chan & Brown, P.A., providing legal representation. Gary Brandt, Managing Director at Stifel, highlighted the transaction's market reception. “The marketplace has fully embraced this bond transaction, with 35 of the largest and most sophisticated investors in the country placing more than $1.8 billion of orders for this $305 million financing resulting in an attractive borrowing cost,” Brandt stated. “This support reflects a high level of confidence in this joint venture partnership between the U.S. Army and The Michaels Organization to provide high-quality homes for 15,000 military families for many years to come. It was an honor for our Stifel team to join this incredibly talented group of individuals to help create a new source of capital for this very important program.”

Jere Thompson, partner at Ballard Spahr, also shared his perspective on the bond financing. "It was a privilege working with Michaels, Levine Staller, the Army, and Stifel in structuring this transaction. Having this unique opportunity to serve as Transaction Counsel to the $305 million bond issue allowed us to be creative in monetizing the residual revenues of the Army from the military housing joint ventures with Michaels in order to permit the immediate financing of improvements at the installations jointly owned and operated by Michaels and the United States Army,” Thompson remarked.

Implementation of Michaels’ five-year development plan is slated to begin this summer, with projects at all installations proceeding concurrently.

For more information, visit www.tmo.com.

Source: The Michaels Organization via Newswire