Why is there so much talk about CCA and prison guards on this board? I thought PZN was going to become a REIT and most of their income was going to be derived from building prisons and other correctional facilities and leasing them back to whatever governmental agency they are doing business with. I thought PZN would not have anything to do with the management part of the business.
If the above is true, why should CCA's problems reflect negatively on PZN. For instance, Franchise Finance of America builds and leases restaurants. If somebody gets food poisoning at a Wendy's, or Hardees, or a Chili's that was built by FFA, don't blame FFA. They just built the physical plant. They didn't cook the burgers. Please enlighten me.
It's my understanding, when PZN leases from CCA private Opco they are leasing EVERYTHING, building and staff to make it functional as a prison facility. That's why the lease rates are 30%+. It's not just the 11% fixed PROPERTY lease rate.