CoreCivic leaders have sold 42 buildings leased to government agencies, cutting the company’s property holdings by nearly a fifth as it moves on from its status as a real estate investment trust.
Brentwood-based CoreCivic unloaded the buildings to an unnamed buyer for $106.5 million and expects to book a net gain of $27 million on the deal. The buildings comprised 573,000 rentable square feet in total and leave CoreCivic owning 15 properties that have a combined 2.7 million square feet of space. Of those, executives are looking to sell another five that have a collective 1.1 million rentable square feet.
"We are pleased with the positive market response we have seen throughout the marketing process of our non-core government leased properties, and today's closing announcement is a positive initial step in the process to recycle capital towards higher returning opportunities," said CoreCivic President and CEO Damon Hininger, whose team will use its gains from the sale to repay some of the company’s revolving debt. “The remaining non-core assets we are evaluating for sale are significantly larger in terms of gross rentable square feet, both individually and in aggregate, and we remain optimistic in our prospects for consummating additional sales."
Shares of CoreCivic (Ticker: CXW) ended last week at $6.55, giving up more than 3 percent to cap a year in which they lost nearly 60 percent of their value.