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REAL ESTATE TRANSACTIONS | 3 Months Ended
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Mar. 31, 2019
REAL ESTATE TRANSACTIONS |
4. | REAL ESTATE TRANSACTIONS
Acquisitions On February 20, 2019, CoreCivic acquired the South Raleigh Reentry Center, a 60-bed residential reentry center in Raleigh, North Carolina, for $0.9 million, excluding transaction-related expenses. In connection with the acquisition, CoreCivic expects to become the contracting party to a contract with the Federal Bureau of Prisons to provide reentry services for both male and female residents. In allocating the purchase price of this transaction, CoreCivic recorded $0.9 million of net tangible assets. CoreCivic acquired the property as a strategic investment that further expands the Company's network of residential reentry centers. On May 6, 2019, CoreCivic acquired a 36,520-square foot office building in Detroit, Michigan, for $7.2 million, excluding transaction-related expenses, that was built-to-suit for the state of Michigan's Department of Health and Human Services ("MDHHS") in 2002. The property is 100% leased to the Michigan Department of Technology, Management and Budget ("MDTMB") on behalf of MDHHS through June 2028 and includes one six-year renewal option at the sole discretion of the MDTMB. Financing Leasing Transactions On January 24, 2018, CoreCivic entered into a 20-year lease agreement with the KDOC for a 2,432-bed correctional facility the Company is constructing in Lansing, Kansas. The new facility will replace the Lansing Correctional Facility, the State's largest correctional complex for adult male inmates, originally constructed in 1863. CoreCivic will be responsible for facility maintenance throughout the 20-year term of the lease, at which time ownership will revert to the State. Construction of the new facility commenced in the first quarter of 2018 and is expected to be completed during the first quarter of 2020. CoreCivic expects to account for the lease with the KDOC as a multiple element lease with a portion of the lease payments attributable to the capital lease. In addition, portions of the lease payments will be attributable to maintenance services and capital maintenance, representing two separately valued non-lease components. As of March 31, 2019, CoreCivic has capitalized $74.4 million associated with the construction of the project. Idle Facilities As of March 31, 2019, CoreCivic had eight idled facilities that are currently available and being actively marketed as solutions to meet the needs of 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):
|  |  |  |  |  |  |  | Net Carrying Values |
|  | Design |  |  | Date |  | March 31, |  |  | December 31, |
Facility |  | Capacity |  |  | Idled |  | 2019 |  |  | 2018 |
Prairie Correctional Facility |  |  | 1,600 |  |  | 2010 |  | $ | 15,086 |  |  | $ | 15,278 |
Huerfano County Correctional Center |  |  | 752 |  |  | 2010 |  |  | 16,497 |  |  |  | 16,660 |
Diamondback Correctional Facility |  |  | 2,160 |  |  | 2010 |  |  | 40,800 |  |  |  | 40,962 |
Southeast Kentucky Correctional Facility |  |  | 656 |  |  | 2012 |  |  | 20,889 |  |  |  | 21,098 |
Marion Adjustment Center |  |  | 826 |  |  | 2013 |  |  | 11,666 |  |  |  | 11,770 |
Kit Carson Correctional Center |  |  | 1,488 |  |  | 2016 |  |  | 55,069 |  |  |  | 55,507 |
Eden Detention Center |  |  | 1,422 |  |  | 2017 |  |  | 37,966 |  |  |  | 38,349 |
Torrance County Detention Facility |  |  | 910 |  |  | 2017 |  |  | 34,968 |  |  |  | 35,355 |
|  |  | 9,814 |  |  |  |  | $ | 232,941 |  |  | $ | 234,979 |
CoreCivic also has two idled non-core facilities containing an aggregate of 440 beds with an aggregate net book value of $3.7 million. CoreCivic incurred approximately $3.1 million and $3.5 million in operating expenses at the idled facilities for the three months ended March 31, 2019 and 2018, respectively. CoreCivic considers the cancellation of a contract as an indicator of impairment and tested each of the idled 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.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 + Details
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