NASHVILLE, Tenn. — Nashville-based Corrections Corporation of America (CCA), the nation’s largest owner of partnership correctional and detention facilities, announced on Aug. 31 that it has acquired four community corrections facilities for approximately $13.5 million. The facilities were previously owned and/or operated by a privately held owner of community corrections facilities and other government leased assets.
The four acquired community corrections facilities have a capacity of approximately 600 beds and are leased to Community Education Centers Inc. (CEC) under triple net lease agreements that extend through July 2019 and include multiple five-year lease extension options, according to a statement by CCA. CEC separately contracts with the Pennsylvania Department of Corrections and the Philadelphia Prison System to provide rehabilitative and re-entry services to residents and inmates at the leased facilities.
"We are pleased to announce the acquisition of this asset portfolio consisting of four high quality residential re-entry properties," said Damon Hininger, CCA’s chief executive officer, in a statement. "The transaction introduces a strategic alternative to our traditional model of owning and operating residential re-entry facilities by providing a real estate-only solution that offers CCA attractive lease agreements accretive to earnings with a tenant that has long-standing contracts with a government partner to provide residential re-entry services."
This real estate-only acquisition builds on CCA’s entry into the residential re-entry space, which began with the purchase of Correctional Alternatives Inc. in 2013.
"We believe the residential re-entry space is an attractive place for us to be overall, as it serves as a natural extension of the extensive re-entry programming and capacity solutions we offer in our correctional facilities, is aligned with needs we’re hearing from governments around the country, and provides an attractive real estate investment,” Hininger added in a statement.
CCA is a publicly traded real estate investment trust and is the nation’s largest owner of partnership correction and detention facilities. It is also one of the largest prison operators in the United States. Together with this most recent acquisition, the company now owns or controls 51 correction and detention facilities, with a design capacity of approximately 71,000 beds. CCA also manages 11 additional facilities owned by government partners with a total design capacity of approximately 14,000 beds, in 18 states as well as the District of Columbia.