Michaels to Invest More Than $500 Million in Its Military Housing Portfolio

Capital to be Deployed Across Seven Army Installations Where Michaels Owns and Manages Privatized Military Housing to Fund New Home Development, Existing Home Renovations, Historic Home Rehabilitations, Infrastructure Improvements, and New Amenities

CAMDEN, NJ / ACCESSWIRE / March 6, 2024 / The Michaels Organization, a national leader in residential real estate, announced today that it has secured financing to support investing more than $500 million in its U.S. Army housing portfolio over the next five years.

The substantial reinvestment -- the largest in Michaels' history since it became a private sector partner to the U.S. Department of Defense -- will be funded in part by existing project reinvestment funds and partly through a first-of-its-kind $305 million bond issuance, which achieved a successful financial closing on March 6, 2024, thanks to a world-class team of financiers, attorneys, and investors.

The development plan, created in conjunction with Army leadership, includes the construction of new homes, rehabilitation of historic homes, and interior and exterior renovations of existing homes. Michaels is also planning to make a significant investment in new infrastructure and amenities for service members and their families. This endeavor will improve housing at Fort Belvoir, Fort Leavenworth, Fort Moore, Fort Irwin, Fort Huachuca, Presidio of Monterey, and Yuma Proving Ground.

Senior Vice President of Investment Management Erik Roberson spearheaded this initiative for Michaels, guiding the effort from start to its successful conclusion.

"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," Roberson said.

Congress authorized the Military Housing Privatization Initiative in 1996. Michaels has been a private-sector housing partner to the Department of Defense since 2004, when it was selected to develop, own, and manage the family housing at Fort Leavenworth.

"We consider it an incredible privilege to house heroes and serve their families," said Michaels' Chief Executive Officer John J. O'Donnell. "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. We know that providing excellent housing is important to our service members' quality of life, as well as essential to the military's recruitment and retention efforts, " O'Donnell said.

The team for the bond issuance included Stifel and Ballard Spahr LLP, each of whom has proven track records of navigating complex financial transactions and working with high-level and committed institutional investors. Michael Sklar, a partner at Levine, Staller, Sklar, Chan & Brown, P.A, provided legal representation for Michaels during this transaction.

"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," said Gary Brandt, Managing Director at Stifel. "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, the partner at Ballard Spahr in charge of the bond financing, said: "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."

Michaels' five-year development plan will begin implementation this summer and will include work at all installations concurrently.

About The Michaels Organization

Michaels is a national leader in residential real estate, offering full-service capabilities in design, development, property management, construction, and investment management. Serving 200,000 residents in more than 570 communities across 39 states, the District of Columbia, and the U.S. Virgin Islands, Michaels is committed to crafting housing solutions that jumpstart education, civic engagement and neighborhood prosperity, and to creating Communities That Lift Lives. Visit TMO.com our Media Room, and follow us on LinkedIn.

About Stifel

Stifel Financial Corp. (NYSE:SF) is a financial services holding company headquartered in St. Louis, Missouri. The company's broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company's website at www.stifel.com.

About Ballard Spahr

Ballard Spahr is an Am Law 100 law firm with more than 600 lawyers in 15 U.S. offices, serving clients across industries in litigation, transactions, and regulatory compliance. The firm's Public Finance and Housing Finance practices are national leaders in planning and executing transactions that benefit our clients and their communities, including the privatization of Military Housing. Ballard Spahr public finance attorneys have participated in the issuance of more than $1 trillion of tax-exempt obligations in all states, the District of Columbia, and American territories. Thomson Reuters continuously ranks Ballard Spahr among the top firms in the country each year as bond counsel and underwriter's counsel. Ballard Spahr's Military Lending team attorneys work with lenders and loan servicers to ensure regulatory compliance, and the firm's Distressed Assets and Opportunities initiative focuses on in all aspects of investing, lending, restructuring, and enforcement to help clients address the challenges and opportunities of economic uncertainty.

Contact Information

Laura Zaner
Vice President, Michaels Corporate Marketing
lzaner@tmo.com
856-988-5983; 856-630-1540

Neil Shapiro
Head of Corporate Communications
shapiro@stifel.com
212-271-3447

SOURCE: The Michaels Organization

View the original press release on newswire.com.