There is not enough gold in Fort Knox to build, and upgrade the needed facilities to house inmates males and females, juveniles and adults. The economy has been good for quite some time now, when this changes, the units of government will be wanting some third party to do so due to other uses of tax monies, and here is where the REIT's come in to the game plan.
my ignorance, but it seems that many of you on several of the private corrections boards are using the same logic to predict big returns, even when stocks decline throughout the sector. The standard research information, earnings ratio, etc, don't seem to have much validity here. I once had a boss who said that if he did not get 10% return on investment, he would sell the business and put the money in the bank, yet many RFP responses are now coming in with an ROI of 6-8%. The markey sees big returns in other areas, and even if logic didtates that this industry should be doing great things, it isn't. Add that to the general public queasiness about privatizing corrections, and it seems that investment here becomes counter intuitive.