The GEO Group Inc., a Boca Raton, Fla.-based correctional facilities company, has announced plans to position itself to operate in compliance with the real estate investment trust (REIT) rules of the Internal Revenue Code, beginning Jan. 1, 2013.
According to the company, this decision follows a ‘thorough analysis and careful consideration by GEO of ways to maximize shareholder value through alternative financing, capital and other strategies.’ GEO plans to take the ‘necessary steps to position itself to qualify as a REIT for 2013.’
‘Based on our extensive work over the past few months, our board and our management team strongly believe that positioning GEO for a REIT conversion will maximize our company's ability to create shareholder value given the nature of our assets, help lower our cost of capital, draw a larger base of potential shareholders, provide greater flexibility to pursue growth opportunities and create a more efficient operating structure,’ says George C. Zoley, GEO's chairman, CEO and founder. ‘We believe these actions will enable our shareholders to begin enjoying the benefits of REIT status as soon as possible.’
Zoley adds that the migration towards REIT status makes sense, because ‘fundamentally, GEO is in a real estate intensive industry. Our present company profile has evolved over several years, during which time, we have developed and financed many new detention and correctional facilities for federal and state government clients.’
‘Jailhouse Rock’ photo courtesy of Jazz.com