In an announcement May 27 through the Australian Stock Exchange, Sydney-based developer and contractor Lendlease said it would refocus operations and real estate investment in its native market and divest U.K. and U.S. projects and assets—an overall transaction it said would "recycle" $2.9 billion into the Australia market while exiting international construction.

Almost immediately after the announcement, on May 28, Milford, Mass.-based Consigli Building Group Inc. said it will acquire Lendlease’s New York and New Jersey construction operations, which comprise most of its U.S. activity—a deal the U.S. contractor said includes employees and work associated with about 45 current under-contract and pre-construction projects. 

Terms of the transaction were not disclosed. 

In a stock exchange filing, Lendlease Chairman Michael Ullmer said the firm "recognizes that our security price performance and security holder returns have been poor as we have faced structural challenges and a prolonged market downturn. We need to take significant action at an accelerated pace to deliver value for our security holders, capital partners and customers."

Claire Johnston, CEO of Lendlease Americas, noted in a statement, that "as Lendlease’s global strategy is redirecting its construction and development focus more closely to Australia, I am confident that our teams ... will ensure the future success for our clients and our people."

Lendlease's New York City office has operated since opening in 1979. The firm, which acquired British construction company Bovis in 1999, now ranks at No. 90 on the ENR Top 400 Contractors List, reporting $1.44 billion in construction revenue.

“Expanding our New York and New Jersey portfolio with the addition of Lendlease, a highly complementary business to ours, signifies our dedication to growth and excellence in this core market,” said Consigli CEO Anthony Consigli in a statement. "Consigli and Lendlease have a successful and longstanding relationship working as partners on many projects, and this acquisition is a natural fit. As we leverage our combined strengths, expertise, and capabilities, we’re poised to deliver heightened value to our clients."

Few Details Offered

Consigli did not disclose details on whether any operations in the combined company might be eliminated or how integration of the two firms could affect projects, saying it could not comment beyond the announcement of future operations.  

“I am extremely proud of all that our team has accomplished over the last 45 years, and this transaction is a testament to our New York office’s significant track record of successfully delivering world-class projects," Johnston said. "As we have built our relationship over the years, I have long admired Consigli’s leadership and commitment to quality, safety and customer service.” 

Steven Sommer, executive general manager and president of East Coast construction for Lendlease Americas, added that "in combining our New York construction expertise with Consigli, we will increase value and services we can offer clients all while continuing to deliver innovative projects for world-class hospitals, global leading pharmaceutical companies and premier New York developers.”  

Lendlease noted in a presentation to investors that to achieve the goals of its strategy, the firm listed three categories of assets and projects it will exit.

Real estate and projects Lendlease will sell outright include its Chicago projects Southbank and Lakeshore East, where the firm has closed the first condos of the residential megaproject with owners, and Hayes Point in San Francisco.

The second category includes development plans in which Lendlease has joint venture partners. Some of those interests will be sold, the company said, and some will become part of Lendlease's investment management business. Transferring projects include the Stratford Cross office building and Elephant Park for-sale apartment project in London; 1 Java Street, a residential project in New York City; Habitat, a mixed-use project in Los Angeles; and Forum, a life sciences development in Boston. The filing said Lendlease would continue to invest in new U.S. and U.K. development projects if investors agree to do so.

The final category of divestment involves large U.K-based projects for which Lendlease is master developer, some involving government landowners. The company said it would continue to manage these developments to achieve planning permission or to undertake remediation activity before selling its interests and transferring them to new developers.

Lendlease said in the filing that sale of its privatized U.S. military housing business also is part of the exit plan.