SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2018

SUBSEQUENT EVENTS

12. SUBSEQUENT EVENTS

As of June 30, 2018, the Company reclassified a property it owns as held for sale.  In connection with this reclassification, the Company wrote-down the value of the property to its net realizable value, recognizing an asset impairment charge of $1.6 million.  The Company has entered into an agreement to sell the property which is expected to close in the second half of 2018.  The Company intends to use the net proceeds from the sale to pay-down a portion of the amounts outstanding under the Revolving Credit Facility.

On July 17, 2018, the Company completed the acquisition of a portfolio of twelve properties for $12.0 million, excluding transaction-related costs, 100% leased to the U.S. Federal Government through the General Services Administration on behalf of the Social Security Administration, the Department of Homeland Security, and U.S. Immigration and Customs Enforcement.  Since this was a portfolio acquisition, the Company may market up to three of the properties for sale.  

Pursuant to an agreement executed in 1998, the state of Montana had an option to purchase the Crossroads Correctional Center at fair market value less the sum of a pre-determined portion of per diem payments made to the Company by the State, resulting in ownership of the Crossroads Correctional Center effectively reverting to the state of Montana in the short-term.  During the third quarter of 2018, the Company entered into an agreement with the State to extend the Company's ownership of the Crossroads Correctional Center for the estimated duration of its useful life for $34.1 million, and extended the management contract until June 30, 2021.