The GEO Group, Inc. Enters into Purchase Agreement to Acquire the 770-Bed Western Region Detention Facility in San Diego, California for $60 Million

Published: 2025-07-01 14:06:35 ET GEO

Published on 07/01/2025 at 14:06

The GEO Group, Inc. announced that it has entered into a purchase agreement with SDCC Middle Block, LLC (the "Seller"), an affiliate of Holland Partners Group, to acquire the 770-bed Western Region Detention Facility located in San Diego, California (the "San Diego Facility") for $60 million. GEO currently leases the San Diego Facility for approximately $5.1 million annually under a lease agreement that expires on March 31, 2029. GEO has a contract with the U.S. Marshals Service for the exclusive use of the San Diego Facility, which generates approximately $57 million in annualized revenues.

The purchase of the San Diego Facility is expected to close on July 31, 2025, subject to the satisfaction of customary closing conditions, and is expected to be funded as a like kind real estate property exchange with proceeds from the previously announced sale of the GEO-owned Lawton Correctional Facility in Oklahoma (the "Lawton Facility"), which is expected to close on July 25, 2025, resulting in an estimated capital gains cash tax savings of approximately $9.5 million. Following the closing of the sale of the Lawton Facility and the purchase of the San Diego Facility, GEO expects to have approximately $222 million in net proceeds. GEO expects to use the net proceeds, along with cash on hand and available liquidity, to pay off senior secured debt, including approximately $300 million in floating rate debt, which is expected to position GEO to consider potential future capital returns.