U.S. Government Buys SoCal ICE Complex for $950M

GEO Group has sold a three-property immigration detention complex in Southern California’s Inland Empire for $950 million to the federal government for the U.S. Immigration and Customs Enforcement (ICE).

The Boca Raton, Fla.-based prison operator sold two ICE processing centers, one with 1,280 beds and another with 660 beds, as well as the 704-bed Desert View Annex, all in the city of Adelanto in San Bernardino County. The Department of Homeland Security acquired the 2,644 beds.

GEO expects to net roughly $705 million after taxes, transaction fees and other expenses. The company said it plans to use proceeds, along with operating cash flow, to reduce debt, repurchase shares and fund general corporate purposes. 

Its board simultaneously increased GEO’s share-buyback authorization by $750 million to $1.25 billion, effective through the end of 2029.

GEO is also set to continue providing support services at all three facilities under its existing contract with ICE. The agreement currently runs through December 2029 and includes a five-year option to extend through December 2034.

GEO said it is in discussions to sell multiple other company-owned facilities to ICE, in which GEO would continue managing the properties under long-term contracts.

The transaction comes amid a broader expansion of DHS and ICE’s real estate footprint. Commercial Observer reported earlier this year that the agencies have been negotiating office leases as well as acquisitions and leases of large detention uses. 

GEO owns or provides services at 97 facilities totaling approximately 76,000 beds worldwide.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.