As I understand it, substantially all of a REIT's income-producint activities must be passive in nature (i.e. leasing out real estate) in order to qualify as a REIT. The 10K for PZN states that the management contracts (to manage the prisons) have been transferred to several new entities, of which PZN retains some ownership interest.
Does anyone know whether this is an issue for maintaining PZN's REIT status? Does substantially all of PZN's cash flow result purely from leasing out its prisons? The reason I ask is that I like owning PZN for its prison constructing and leasing business but don't want to buy into the prison management business (too risky, volatile, legal problems, breakouts, etc).