Case Studies

Vandenberg Air Force Base
Vandenberg AFB is home to the 14th Air Force, 30th Space Wing, 381ST Training Group, and the Western Launch and Test Range (WLTR), and is responsible for satellite launches for military and commercial organizations, as well as testing of intercontinental ballistic missiles, including the Minuteman III ICBMs. Concourse was engaged by the Air Force to provide private-sector financial, real estate investment and development expertise in support of the Air Force’s Military Housing Privatization Initiative (MHPI) at Vandenberg AFB. The project included obtaining Air Force approval, from concept development through selection of the Highest Ranked Offeror (HRO), and the real estate and financial transaction closure. The project involved 1,336 existing housing units and an end-state unit count of 867. Concourse handled all elements from project concept to closing.

The scope of work included preparing a pro forma that incorporated the data from the market study and from the review of existing plans and housing into the current Air Force model; preparing the preliminary Economic Assessment (EA) for the project to evaluate the viability of the privatization scope as compared to other alternatives; preparing an OMB Budget Scoring Report; preparing the concept package, associated briefings, fact sheets, and financials through all stages. Concourse also drafted the project RFP and facilitated all activities necessary to complete the release of the RFP to the public and move the project toward transaction closing with the Highest Ranking Offeror (HRO). Upon award of the project to a private sector developer, Concourse provided technical, administrative, and other support necessary to facilitate the transaction closure process. As part of this process, Concourse facilitated negotiations with the developer to consummate a deal acceptable to both parties. Concourse’s effort on this assignment resulted in a successful $137 million privatization project that supports the mission of Vandenberg AFB.

Hill Air Force Base
Hill AFB, located in northern Utah, 29 miles north of Salt Lake City, is the home of the Air Force Materiel Command Ogden Air Logistics Center which is the worldwide manager for a wide range of aircraft, engines, missiles, software and avionics and accessories components. Concourse was engaged as a critical subcontractor, to assist with the review of Enhanced Use Leasing proposals submitted to the Air Force for private sector development on under-utilized land at Hill AFB.

Specifically, Concourse evaluated and rated the development and finance sections of the submittals and provided detailed financial analysis and support the deal team through the selection process. Concourse evaluated the strengths and weaknesses of each proposal as it related to each of the proposal requirements for development and finance. Concourse attended the offerors’ oral presentations, participated in the deal team meeting to recommend a highest ranking offeror, and supported the prime contractor through the approval process. Concourse provided valuable insight, including perspective on how the private sector approaches EUL projects and current financing expectations and underwriting criteria. Concourse’s efforts resulted in a fully executed project between the Air Force and a private sector developer. The project, which broke ground on October 10th 2008, is also known as “Falcon Hill National Aerospace Research Park” and is estimated to create 15,000 new aerospace industry jobs and approximately 60,000 additional jobs upon completion. This project is one of the first Air Force EUL projects to reach the development phase and is expected to generate considerable value for the Air Force.

Elmendorf Air Force Base
Elmendorf is a 13,455 acre installation located in Anchorage, Alaska, that supports and defends U.S. interests in the Asia Pacific region and around the world by providing worldwide air power projection. To support this mission, the Air Force engaged Concourse to focus on using “underutilized” property at Elmendorf AFB to generate “in-kind services” by entering into real estate transactions with the private sector. Concourse’s assignment included preparing a base-wide inventory of potential real estate opportunities considering the financial, operational, force protection, environmental condition, and infrastructure issues identified by the installation leadership, and the relevant real estate market conditions. Concourse assessed the market for each candidate property at Elmendorf AFB in light of these issues and determined the acceptable uses. Concourse assessed the benefits that could be derived from leasing the underutilized properties, and described a strategy for marketing/leasing the properties to maximize potential benefits with identification of absorption rates for each acceptable use and developing a risk/return analysis. Concourse’s recommendations were approved and the project entered the next phase.

Charleston Air Force Base
Charleston AFB, located in Charleston, South Carolina, is an Air Mobility Command base, and home to the 437th Airlift Wing. Since June 14, 1993, the primary mission of Charleston AFB has been the operation and maintenance of the C-17 Globemaster III. The C-17, or "Spirit of Charleston", is considered the nation's preeminent aircraft for cargo delivery. Concourse was engaged by the Air Force to study the installation and create a detailed development risk analysis and a market demand analysis for potential Enhanced Use Leasing projects and to determine an overall project “return” to the Air Force by addressing fair market value, Air Force investment, and an analysis of non-quantifiable benefits and costs. The focus of Concourse’s efforts included four sites controlled by Charleston AFB, each of which was evaluated as a potential EUL candidate: "Hunley Park" (54 acres), "Exchange North" (79 acres), "Exchange South" (51 acres), and "2000 Area" (30.7 acres). The Concept Opportunity Study concluded with Concourse’s recommendations as to which EUL projects warranted further consideration. The Air Force and the installation have accepted Concourse’s recommendations and the project is currently out for solicitation with the possible EUL developers.

Hanscom Air Force Base
Hanscom AFB is located Massachusetts, about 15 miles northwest of Boston, immediately south and east of Hanscom Field. Hanscom is the headquarters of the Electronic Systems Center (ESC) and supports the Air Force Research Laboratory's Sensors and Space Vehicles directorates, MIT Lincoln Laboratory, the MITRE corporation, and various other companies and groups related to the Department of Defense. Over 3,000 active duty, Reserve and National Guard military personnel and DoD civilians work and live at Hanscom Air Force Base. The Air Force engaged Concourse to determine the viability of conducting Enhanced Use Leasing Project at Hanscom to unlock equity trapped in their fixed assets. To execute this assignment, Concourse conducted extensive local market research, examined market rents and expenses, reviewed environmental data, and met with local installation stakeholders. Concourse’s scope of work included an evaluation of the potential returns and risks associated with the candidate property, based on real estate data from the local market and an evaluation of the characteristics of Hanscom’s real estate assets. The risk analysis for this potential EUL project as well as a Return Analysis Market Data was included in the Concept Opportunity Study performed by Concourse. The result of Concourse’s effort was identifying a potential EUL project that can generate in-kind consideration of significant value for Hanscom and AFMC. Concourse has been engaged to proceed to the next phase of this project.

Tyndall Air Force Base
Tyndall AFB is located 12 miles east of Panama City, Florida, and the base operating unit is the 325th Fighter Wing of the Air Education and Training Command. Tyndall AFB has owned and managed an underutilized asset, known as the Lynn Haven Fuel Depot since acquiring it in 1977. The 184 acre asset, located 12 miles from the base, contained a waterfront parcel and railroad right-of-way. Concourse was engaged to complete an extensive investigation of the site, the local market conditions, and the development constraints to determine its development viability. In developing a project concept and business case Concourse collected and analyzed comparable real estate transaction data assessor data, rental / lease rates, operating expenses, income and residual value for various uses. Factoring in the local interest in the site, the Air Force ultimately determined that the best alternative would be to transfer 40 acres to a local university and select a developer for private sector development of the remaining 144 acres via a (2869) Milcon Exchange. The Air Force again engaged Concourse, along with a partnering firm, to perform the follow-on real estate, financial, and consulting services to complete the proposed Milcon Exchange. Concourse developed the Notice of Availability, hosted an industry forum, evaluated proposals from the development community, and provided support to the Air Force to select an offeror. Concourse’s efforts resulted in the selection of a development team for one of the first Air Force Milcon Exchanges under 10 USC 2869.

Navy Hawaii PPV
Concourse was engaged by a $9 billion publicly traded, national developer with a long history of successful residential development and management experience to provide consulting support on the Navy’s housing privatization program known as Public Private Ventures (PPV). Concourse’s scope of work included assisting the client with pursuing and executing the Navy's PPV project in Hawaii, encompassing the privatization of approximately 1,900 family housing units, redevelopment of the units and management of the units for a 50-year period. The Concourse Group lead the proposal effort, including assembling the project team, creating the financial pro formas, coordinating deliverables with all team members, and drafting project documents. Post award, during the Exclusive Negotiations period, Concourse provided integral assistance during negotiations with the Navy. During the eight month Exclusive Negotiations period, The Concourse Group was involved in all aspects of the project and successfully:

Coordinated the key consultants and the overall due diligence process.
Drafted the preliminary version of the business points memorandum for client review.
Served as a member of the Design and Construction team.
Served as a member of the Agreements team.
Served as a member of the Environmental team.
Served as a member of the Finance team. Supervised the production of the project pro forma and sensitivity analyses.
Created an asset management plan for reinvesting in the project.
Developed and maintained the financial pro forma for the project.
Reviewed business agreements and incorporated negotiated terms into the pro forma.
Conducted numerous feasibility and sensitivity analyses.
Assembled development cost backup for review by the Navy and its consultants.
Prepare extensive technical financial models that incorporate the needs of the DoD, the rating agencies, and the developer.
Prepare sensitivity analysis that tests increases and decreases in BAH, operating expenses, and or interest rates to determine the resulting changes in the project scope.

The Concourse Group's efforts resulted in award of the project to their client, successful project closing, and the execution of a partnership between the private sector and the Navy. Phase 1 alone resulted the privatization of over 1,900 housing units with a total development scope of $400 million.

Army Housing Privatization - Korea
The Assistant Secretary of the United States Army Installations and Environment (ASA I&E) and the United States Army Installation Management Command Korea (IMCOM-K) were charged with providing family housing needed to support the relocation of forces from Yongsan in Seoul, to the United States Army Garrison (USAG) Humphreys in Pyeongtaek, Korea. This project required the private sector to develop, operate, and finance the family housing privatization project at USAG Humphreys on approximately 115 acres that were set aside for the 2,400 proposed family housing residences needed to support the relocation beginning in 2011. The Government's goal was to employ the best commercial practices built on partnerships with world-class private sector developers, investors and operators to build quality, sustainable, residential communities for US soldiers and their families. Concourse, as a subcontractor on the Army team, was engaged to analyze the cash flow pro formas, the development budges, the operating expenses and to perform analyses of multiple development scenarios. Concourse’s scope of work also included determining the strengths and weaknesses of each proposal, reviewing the proposers’ financial statements, and reviewing the credit worthiness of the Offeror and the proposed financing terms. This assignment is in progress.

Army Housing Privatization - Fort Leavenworth
Fort Leavenworth is located in Leavenworth County, Kansas, in the upper northeast portion of the state. It has been in operation for over 170 years and has been historically known as the "Intellectual Center of the Army". The garrison supports the U.S. Army Training and Doctrine Command (TRADOC) by managing and maintaining the home of the U.S. Army Combined Arms Center (CAC) which involves leader development, collective training, Army doctrine and battle command (current and future). Under the Military Housing Privatization Initiative, the Army intended to privatize approximately 1,583 family housing units at Fort Leavenworth. For this project, Concourse’s scope of work included:

Drafting the economic models required including: the development budget, projections, operations budget, multi-tranche debt model, sources and uses, and the monthly and annual cash flow statement
Creating an occupancy phasing plan, coordinate the plan with the land planning and construction professionals, and incorporate the occupancy plan with the cash-flow model.
Reviewing various debt structures and implement the most advantageous debt structure available.
Assisting with the overall CDMP-preparation strategy.
Developing the financial pro forma for the project, and conducting numerous scenario and feasibility analyses for the project
Writing a debt competition RFP that was submitted to seven prominent investment banks and lenders
Evaluating the responses to the debt RFP, and ultimately recommending the highest ranked lender
Facilitating communication between Army leaders, Army consultants and the developer with respect to financial issues Concourse’s efforts resulted in the successful privatization of 1,583 family housing units at a total project cost of approximately $337 million.

Redstone Arsenal Enhanced Use Leasing
Redstone Arsenal is a U.S. Army post and located next to the city of Huntsville in Madison County, Alabama, and its primary tenant organizations are the United States Army Aviation and Missile Command and the NASA Marshall Space Flight Center. Concourse was approached by an $8 billion national real estate investment trust (REIT) who was interested in expanding their business to include Enhanced Use Leasing projects. Concourse introduced the REIT to a successful local/regional developer, Jim Wilson Associates (JWA), and facilitated a JV relationship to pursue the Redstone Arsenal EUL project. Concourse was engaged to head the pursuit effort. The scope of work included creating a pursuit team, developing a project concept, coordinating the deliverables from the team members, writing the proposal response, and organizing the oral presentation. The development proposal envisioned the creation of up to 4 million square feet of distinct campus style office space at Redstone Arsenal. The project includes the creation of a Tax Increment Financing (TIF) District to fund infrastructure improvements for the project. The TIF is projected to ultimately raise up to $60 million for the development of supporting infrastructure. Concourse’s diligent work resulted in the award of the Redstone EUL project to its client following the submission of the proposal and the oral presentation to the U.S. Army Corps of Engineers (USACE).

Southwest Region Marketability Study
General Services Administration’s Greater Southwest Region wanted to explore subleasing vacant space at 44 separate locations to non-federal tenants. To assist in this effort, the GSA engaged Concourse to analyze various lease documents and conduct due diligence for these 44 properties which spanned the Region’s five state territory of Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. The outcome of Concourse’s effort was a detailed analysis that explored all possible methods of subleasing vacant space to non-federal tenants. Concourse provided recommendations outlining the optimal course of action for each location based on current real estate market conditions in each submarket and existing lease terms. The analysis completed for each location included: Market rental rates, expenses, and lease terms for each area for the relevant type of space analyzed; Prospective tenants and/or target market for a sublease agreement, or statement as to why subleasing a particular space may not be feasible; estimated cash flow that could be derived from a sublease at the applicable market rental rate; a discounted cash flow analysis; a description of the current state of the rental real estate market; and a proposed marketing strategy for each rental real estate market.

For case studies on any of the following additional projects, please contact The Concourse Group, LLC.

Aberdeen PG, MD
Camp Lejeune/ Cherry Pt, NC/Stewart, NY
Camp Navajo, AZ
Chiefs Group (Cannon AFB, McConnell AFB, Seymour Johnston AFB)
Dobbins AFB, GA
Dyess AFB, TX – phase II
Elmendorf, AK
Fairchild AFB, WA
Fort Eustice / Story, VA
Fort Meade, MD
Fort Shafter/Schofield Barracks, HI
Fort Bliss, TX/White Sands, NM
Fort Leonard Wood, MO
Fort Lewis, WA

Fort Gillem, GA
Fort Hamilton, NY
Fort Belvoir, VA
Grand Forks AFB
Hampton Roads, VA (BEQ)
Hanscom AFB, MA
Kirtland AFB, NM
MacDill AFB
Moody AFB, GA
MCB Camp Pendleton /Quantico, VA
MCB Albany, GA
Morehead City Army Reserve, NC
McChord AFB, WA
Naval Air Station Everett Phase II, WA
Naval Complex San Diego, CA (BEQ)

NE Region-Navy (NY, NJ, CT, RI, ME)
Northwest Region-Navy (Phase I)
NAS Corpus Christi/NAS Kingsville, TX
Naval Complex New Orleans, LA
Offutt AFB, NE
Park City AF Site, UT
Peterson AFB, CO
Patrick AFB, FL
Robins AFB, GA
Southern Group (Charleston AFB, Arnold AFB, Kessler AFB, Shaw AFB)
Snake Creek, Miramar, FL
Selfridge ANGB, MI
Schriever AFB, CO
U.S. Air Force Academy, CO