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REAL ESTATE TRANSACTIONS | 3 Months Ended
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Mar. 31, 2017
REAL ESTATE TRANSACTIONS |
4. | REAL ESTATE TRANSACTIONS
Acquisitions On January 1, 2017, CoreCivic acquired the Arapahoe Community Treatment Center, a 135-bed residential reentry center in Englewood, Colorado, for $5.5 million in cash, excluding transaction-related expenses. The acquisition included a contract with Arapahoe County whereby CoreCivic will provide residential reentry services for up to 135 residents. On February 10, 2017, CoreCivic acquired the Stockton Female Community Corrections Facility, a 100-bed residential reentry center in Stockton, California, in a real estate-only transaction for $1.6 million, excluding transaction-related expenses. The 100-bed Stockton facility is leased to a third-party operator pursuant to a lease agreement that extends through April 2021 and includes one five-year lease extension option. The lessee separately contracts with the California Department of Corrections and Rehabilitation (“CDCR”) to provide rehabilitative and reentry services to female residents at the leased facility. In allocating the purchase price of both acquisitions, CoreCivic recorded $6.6 million of net tangible assets and $0.5 million of identifiable intangible assets. CoreCivic acquired the facilities as strategic investments that further expand the Company’s network of residential reentry centers. Idle Facilities As of March 31, 2017, CoreCivic had seven idled correctional facilities that are currently available and being actively marketed to potential customers. The following table summarizes each of the idled facilities and their respective carrying values, excluding equipment and other assets that could generally be transferred and used at other facilities CoreCivic owns without significant cost (dollars in thousands):
|  | Design |  |  | Date |  |  | Net Carrying Values |
Facility |  | Capacity |  |  | Idled |  |  | March 31, 2017 |  |  | December 31, 2016 |
Prairie Correctional Facility |  |  | 1,600 |  |  |  | 2010 |  |  | $ | 16,806 |  |  | $ | 17,071 |
Huerfano County Correctional Center |  |  | 752 |  |  |  | 2010 |  |  |  | 17,373 |  |  |  | 17,542 |
Diamondback Correctional Facility |  |  | 2,160 |  |  |  | 2010 |  |  |  | 41,260 |  |  |  | 41,539 |
Southeast Kentucky Correctional Facility |  |  | 656 |  |  |  | 2012 |  |  |  | 22,412 |  |  |  | 22,618 |
Marion Adjustment Center |  |  | 826 |  |  |  | 2013 |  |  |  | 12,077 |  |  |  | 12,135 |
Lee Adjustment Center |  |  | 816 |  |  |  | 2015 |  |  |  | 10,220 |  |  |  | 10,342 |
Kit Carson Correctional Center |  |  | 1,488 |  |  |  | 2016 |  |  |  | 58,386 |  |  |  | 58,819 |
|  |  | 8,298 |  |  |  |  |  |  | $ | 178,534 |  |  | $ | 180,066 |
CoreCivic also has two idled non-core facilities containing 440 beds with an aggregate net book value of $3.9 million. From the date each of the aforementioned facilities became idle, CoreCivic incurred approximately $2.9 million and $2.1 million in operating expenses for the three months ended March 31, 2017 and 2016, respectively. CoreCivic considers the cancellation of a contract as an indicator of impairment and tested each of the aforementioned facilities for impairment when it was notified by the respective customers that they would no longer be utilizing such facility. CoreCivic updates the impairment analyses on an annual basis for each of the idled facilities and evaluates on a quarterly basis market developments for the potential utilization of each of these facilities in order to identify events that may cause CoreCivic to reconsider its most recent assumptions. As a result of CoreCivic’s analyses, CoreCivic determined each of the idled facilities to have recoverable values in excess of the corresponding carrying values. On April 30, 2017, the contract with the Federal Bureau of Prisons (“BOP”) at the Company’s 1,422-bed Eden Detention Center expired and was not renewed. CoreCivic has begun to market the facility to other customers, but can provide no assurance that it will be successful in securing a replacement contract. CoreCivic performed an impairment analysis of the Eden facility, which had a net carrying value of $40.9 million as of March 31, 2017, and concluded that this asset has a recoverable value in excess of the carrying value.

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- Definition The entire disclosure for real estate transactions including acquisitions, real estate closures and idle facilities, sales, construction of new facilities, activations, and other leasing transactions. + References No definition available. + Details
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