AAFES continues to invest in facilities

Army & Air Force Exchange Services building exchanges and updating existing ones

During a time when many retailers are tightening the reins on capital expenditures, AAFES (Army & Air Force Exchange  Services), which finances projects through the sale of merchandise and services, is actually accelerating facility renovations to improve service. Funding comes strictly from self-generated, non-appropriated resources and is not a burden to the American taxpayer.

“With a slumping economy, shoppers have been asking more questions about capital improvements,” said Army & Air Force Exchange Service’s senior VP real estate Mike Gividen. “We want our customers to know we are investing in our facilities more than ever before.”

According to Gividen, there is a direct correlation between patronage at the exchange and resulting capital improvement projects.

“AAFES shoppers are essentially AAFES’ shareholders and our goal is to be our customer’s first choice,” he said. “As such, we have a responsibility to properly re-invest in our facilities to provide a pleasant, first-class shopping experience.”

The replacement of aging facilities begins with a thorough evaluation of factors such as age, potential demand and military transformation requirements. Once complete, AAFES’ real estate team is able to identify potential priority locations that are reviewed for replacement.

By the end of 2010, AAFES will have opened five new shopping centers, including the world’s largest exchange, a sprawling 490,000-sq.-ft., multi-use retail development, Freedom Crossing at Fort Bliss, El Paso, Texas. It is the first-ever open-air shopping center to be located on Military Post. This is in addition to six new shopping centers opened in 2009.

Even as it invests in new construction, AAFES is also investing in image updates, or facelifts, of existing exchanges.

“As we executed renovation projects last year, we were experiencing 25%-30% savings because contractors needed work,” said Gus Elliott, VP facilities division in charge of renovations. “As a result, we decided to accelerate future renovations not only to realize capital program savings, but to help the local contractors with increased business during these tough economic times.”

AAFES plans to bring 24 exchanges up to current retail design standards in 2010.

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