Australian construction and development company Lendlease sold its U.S. military housing portfolio to an affiliate of Guggenheim Partners Investment Management, aligning with its planned exit from U.S. and UK developments.
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Guggenheim Partners created Centinel Public Partnerships to take over the portfolio of 10 housing communities and 70 hotels across 26 states and Puerto Rico, the company said Friday. Lendlease announced in July that it would sell the 40,000-unit portfolio to the affiliate for $320M, or 480M Australian dollars.
The deal, which Lendlease said was at a “significant premium to book value,” was subject to consent from the Department of Defense and was expected to close in the first half of this year. Guggenheim Partners is a global investment firm headquartered in New York and Chicago, with more than $330B in assets under management.
The deal is part of Lendlease’s plan to sell most of its overseas assets. The company announced in May that it would exit its construction interests and development businesses in the U.S. and UK, a move expected to generate AU$4.5B.
Lendlease is making the changes to focus on its Australian interests, which yield a higher margin, and to free up capital from markets where investment returns are not as high, the company said at the time.
“Implementation of our strategy is progressing well, with cost savings being realized across the regions as we today move to a simplified management structure,” Lendlease Group CEO Tony Lombardo said in a statement in July.
The U.S. military housing transaction demonstrates a disciplined approach to capital recycling, Lombardo said in the statement.
Nashville, Tennessee-based Centinel Public Partnerships will keep the “core leadership team at the company’s helm,” Guggenheim Partners said in its news release Friday. This includes Justin Kern and Phillip Carpenter, formerly executives for Lendlease’s communities, who will serve as CEO and president, respectively.
“This is a new chapter for our business and the communities and families we serve,” Kern said in the release. “Centinel stands ready to build on our decades-long legacy of creating communities that meet modern needs and enhance the lifestyles of the people who live and work there. We look forward to operating more nimbly and more autonomously as a U.S.-based, fully owned company.”
The portfolio serves more than 3.2 million service members, families and guests, and includes more than 32,000 homes and 12,000 hotel rooms, the company said.
One of those developments, in Doral, Florida, was the first privatized housing project for the U.S. Army in more than a decade. The community of about 75 houses and 60 two-bedroom apartments is on 51 acres near the Army’s U.S. Southern Command.
Lendlease has faced controversy regarding its military housing, including a 2020 lawsuit in which three U.S. Marine Corps families accused Lendlease and others of turning a blind eye to problems such as leaks, mold and roach infestations at Marine housing the companies operate and lease from the U.S. Navy.
In July 2024, an arbitration panel ordered Lendlease to pay a family $10.3M in damages after it was determined that the family’s landlords covered up evidence of mold in their home at Fort Cavazos in Texas.
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