ARLINGTON, Va. - Demand for bachelor housing in the military should remain strong but challenging for developers as a high-profile pilot project in San Diego nears completion, industry executives told The Bond Buyer Conference on Military Housing Privatization Friday.
While the military offers 170,000 private housing units for families, fewer than 3,000 are available for singles, even though only about 25% of men and women in the lower military ranks of E1 through E3 are married, said Tad Guleserian, a prinicipal at Duxbury Financial.
"There's a tremendous demand for unaccompanied military housing," he said.
Construction of housing for singles in the military is more complex and expensive than housing for families on bases, said Curtis Harris, director at Merrill Lynch & Co. While family housing commonly consists of single-family, detached homes, bachelor housing is provided in high-rises that require special security measures and issues of vacancy when service members are on duty.
"Deployments tend not to have that much impact on family housing because the family usually remains behind, whereas they could have a greater impact on bachelor housing," Harris said.
The $280 million Pacific Beacon LLC project in San Diego will provide a template for unaccompanied military housing in all of the critical areas, from environmental to security issues.
The three-tower project, which is about a year from completion, will provide on-shore housing for U.S. Navy crews that previously had to live aboard their ships while in port.
"If you've ever been aboard a Navy ship, you know that the lower the rank, the smaller the quarters," Harris said. "So this provides an alternative."
The high-rises will provide views of San Diego Bay and downtown San Diego and will include a rooftop swimming pool, Guleserian said.
"Progress has been going very well," he said. "We're largely on schedule."
Clark Realty Capital of Bethesda, Md., is building the 18-story towers, an accompanying parking structure and an adjacent parking lot. The real estate investment and management firm Pinnacle of Seattle will manage and maintain the property.
Pinnacle and Clark have worked on 11 military housing complexes for families, but this is their first Navy barracks. Rents for the facility that back the bonds will come from housing allowances.
Although the housing allowances are subject to congressional appropriations, "in this case, I don't think it's ever going to end," Charles Giordano, senior director at Fitch Ratings, who conferred a triple-A on the project.
"I'm really confident about this project," he said.