CENTRACORE PROPERTIES TRUST

CENTRACORE PROPERTIES TRUST

Previous company name
CORRECTIONAL PROPERTIES TRUST
Name change date
12/20/2005
Company Overview
Centracore Properties Trust, previously known as Correctional Properties Trust, is an American-based real estate investment trust (REIT) engaged in the acquisition and development of government facilities. The company changed its name to CentraCore Properties Trust in December 2005. It has its registered office in Palm Beach Gardens, Florida.
CentraCore Properties Trust acquires or develops government facilities, which are leased either directly to government entities or private companies. It leases its facilities under long-term, non-cancelable, and triple-net leases (leases where the tenant is required to pay all operating expenses, taxes, insurance, maintenance, structural and non-structural repairs and other costs). The company primarily focuses on acquiring and developing correctional facilities but has expanded its scope to mental health and higher education facilities.
In January 2007, CentraCore Properties Trust was acquired by The GEO Group, Inc, a world leader in providing diversified services to government agencies around the globe.
Business Summary
CentraCore Properties Trust is an integrated, self-administered and self-managed real estate investment trust (REIT) that acquires or develops government facilities, which are leased either directly to government entities or private companies who operate the facilities on behalf of government entities. The Company leases its facilities under long-term, non-cancelable, triple-net leases (leases where the tenant is required to pay all operating expenses, taxes, insurance, maintenance, structural and non-structural repairs and other costs). The Company focuses on acquiring and developing correctional facilities but has also recently expanded its scope to include essential purpose government real estate projects outside the corrections sector, including mental health and higher education facilities. The Company changed its name from Correctional Properties Trust to CentraCore Properties Trust on December 20, 2005. In January 2007, the Company was acquired by The GEO Group, Inc.
Description and history
CentraCore Properties Trust is an integrated, self-administered and self-managed real estate investment trust (REIT) that acquires or develops government facilities, which are leased either directly to government entities or private companies who operate the facilities on behalf of government entities. The Company leases its facilities under long-term, non-cancelable, triple-net leases (leases where the tenant is required to pay all operating expenses, taxes, insurance, maintenance, structural and non-structural repairs and other costs). The Company focuses on acquiring and developing correctional facilities but has also recently expanded its scope to include essential purpose government real estate projects outside the corrections sector, including mental health and higher education facilities. The Company changed its name from Correctional Properties Trust to CentraCore Properties Trust on December 20, 2005. In January 2007, the Company was acquired by The GEO Group, Inc.

CentraCore Properties Trust’s tenants operate detention facilities under management services or operating agreements with various federal, state and local governmental authorities, including Immigration and Customs Enforcement; Oklahoma Department of Corrections; Karnes County, Texas; Essex County, New Jersey; Lea County, New Mexico; Union County, New Jersey; California Department of Corrections and Rehabilitation; New Jersey Department of Corrections, and the United States Marshals Service (USMS). Of the 13 facilities owned by the Company at March 9, 2006, it leases 11 of these facilities to GEO or its subsidiary, one of these facilities to Community Education Centers, Inc. and one of these facilities to Cornell Companies, Inc. These 13 facilities are located in nine states and have an aggregate design capacity of 7,556 beds.

On January 5, 2006, the Company completed the acquisition of the Mesa Verde Correctional Facility. The Mesa Verde Correctional Facility is a 400-bed, minimum-security correctional facility located in Bakersfield, California, and was acquired from Correctional Institution, LLC, an unrelated party.

Adult Correctional Facilities

Adult correctional facilities are used to house adult inmates on a permanent basis for the duration of their sentences. The adult correctional facilities acquired by the Company include the Karnes Facility, the Central Valley Facility, the Golden State Facility, the Desert View Facility, the Hobbs Facility and the Lawton Facility. The Karnes Facility is a multi-security correctional facility located in Karnes City, Texas, with a design capacity of 480 beds. The facility is situated on approximately 12 acres and contains approximately 77,000 square feet. The GEO Group has subsequently negotiated a long-term operating agreement with Karnes County that expires in 2026.

The Central Valley Facility and the Golden State Facility are minimum/medium security facilities located on adjacent properties in McFarland, California. The Central Valley Facility is situated on approximately 19 acres, and the Golden State Facility is situated on approximately 33 acres. Each facility contains an approximately 95,901 square foot structure with a design capacity of 550 beds. The GEO Group has contracted with the CDOCR to operate each of these facilities, which contracts expire in December 2007.

The Desert View Facility is located in Adelanto, California, which is a minimum/medium security facility. The facility is situated on approximately 16 acres and contains approximately 95,901 square feet with a design capacity of 550 beds. The GEO Group has contracted with the CDOCR to operate this facility, which contract expires in December 2007.

The Hobbs Facility is located in Hobbs, New Mexico, which is a multi-security facility located on approximately 80 acres and contains approximately 360,000 square feet with a design capacity of 1200 beds. The GEO Group has contracted with Lea County to operate the facility, which contract expires in June 2006.

The Lawton Facility is located in Lawton, Oklahoma, which is used as a medium security facility. The facility is situated on 160 acres. The approximately 421,000 square foot structure contains a design capacity for 1,800 beds. The GEO Group’s contract with the Oklahoma Department of Corrections expires in June 2006, and includes two one-year renewal options at the option of the Oklahoma Department of Corrections.

Pre-Release Center

A pre-release center is a minimum- to medium-security facility for inmates nearing parole, offering inmates basic education and pre-employment training, as well as alcohol and drug abuse treatment and counseling. The pre-release centers acquired by the Company are the McFarland Facility, the Delaney Hall Facility and the Mesa Verde Facility.

The McFarland Facility is located in McFarland, California. The facility is situated on approximately five acres, and contains approximately 35,000 square feet. The facility has a design capacity of 224 beds. The GEO Group has contracted with the CDOCR to operate this facility until June 2010.

The Delaney Hall Facility is a 726 bed, minimum-security, correctional facility located in Newark, New Jersey. The facility is situated on approximately five acres, and contains approximately 80,000 square feet. CEC operates the Delaney Hall Facility under three separate operating agreements with New Jersey Department of Corrections, Union County, New Jersey, Essex County, New Jersey.

The Mesa Verde Facility is located in Bakersfield, California. The facility is situated on approximately five acres, and contains approximately 53,000 square feet. The facility has a design capacity of 400 beds. CRN has contracted with the CDOCR to operate this facility until June 2010.

Detention Facilities

Detention facilities are used to house undocumented aliens for the BICE or to house those held by the USMS for trial and are classified as minimum- to medium-security facilities. The detention facilities acquired by the Company include the Aurora Facility, the Queens Facility, and the Broward Facility.

The Queens Facility is located on approximately 1.34 acres in New York, New York. The facility has a design capacity of 200 beds and contains approximately 61,400 square feet. GEO is managing and operating the Queens Facility on behalf of the USMS under a contract option period, which began on July 1, 2005, and ends on June 30, 2006.

The Aurora Facility is located on approximately 46 acres in Aurora, Colorado. The approximately 66,000 square foot medium security facility is operated under a management agreement entered into between the BICE and The GEO Group, which expires in March 2006.

The Broward Facility is located on approximately 10 acres in Pompano Beach, Florida. The facility has a design capacity of 450 beds and contains approximately 86,500 square feet. The GEO Group is operating the facility under a contract with the BICE for 200 beds, with an option to expand by an additional 50 beds at the request of BICE. The contract expires in September 2006, and includes two one-year renewal options at the option of the BICE.

Juvenile Correctional Facilities

Juvenile correctional facilities are intended to house juvenile offenders under standards, which differ from those used to house adult offenders. The Jena Facility is located in Jena, Louisiana, was used to house juvenile inmates. The facility is situated on approximately 100 acres, consists of an approximately 62,400 square foot structure and has a capacity for 276 beds. At the same time as the Company acquired the Jena Facility, it entered into a lease with The GEO Group for the facility at an initial cap rate of 11% with 4% annual escalators for an initial term of 10 years, with three additional renewal options for terms of five years each in length. The lease provides for fixed rental payments to the Company without regard to occupancy. The GEO Group operated the Jena Facility under an operating agreement with the State of Louisiana, which was terminated in July 2000.

Business Line
Engaged in the acquisition and development of government facilities
Subsidiary

Advisor
ERNST & YOUNG LLP
IPO date
5/1998
US SIC Code
6798
Company Address
Suite 101
11376, Jog Road
City province or state postal code
33418, PALM BEACH GARDENS, FL
Phone: +1 561 630 6336
Fax: +1 561 630 6311
Country address: UNITED STATES OF AMERICA
Website url: www.correctionalpropertiestrust.com