Highlands REIT to Pocket $11.5 Million From Hudson ICE Detention Center Lease

Q: Who profits most from Colorado’s new ICE detention center—GEO Group, or the landlord collecting rising rent behind the scenes?

GEO Group appears set to profit far more overall, while Highlands REIT quietly secures a sizable, relatively predictable stream of rent. ICE’s contract with GEO Group is worth about $528.6 million over five years, and GEO has said the Hudson facility could generate roughly $85 million in revenue in its first full year of operations, excluding transportation revenue. That makes GEO the main financial beneficiary in gross dollars because it is the company being paid to run the detention center. But the reporting by Logan M. Davis highlights that GEO is not the only winner. The building owner, Highlands REIT, will collect about $958,333 a month in rent once the facility is occupied, under an 88-month lease with 3% annual rent increases. Federal filings indicate Highlands could clear more than $11.5 million in rent profit from the arrangement. GEO also pays property taxes on top of rent, which further strengthens the landlord’s position. So the answer depends on what “profits most” means. In total dollars tied to the detention deal, GEO Group stands to make much more because it holds the half-billion-dollar operating contract. If the focus is on lower-risk, behind-the-scenes earnings from simply owning the property, Highlands REIT is a major beneficiary, collecting rising rent without operating the facility itself. That is the core finding of the reporting: the detention expansion is enriching not just the operator, but also the real estate owner behind it.

1 articles · Updated · KGNU · Aug 4

$11.5 million in rent profit is projected for Highlands REIT from the Hudson, Colorado ICE detention center, according to reporting on the facility’s landlord.
$958,333.33 a month is the rent GEO Group is set to pay once the center opens, tying the real estate firm’s gains directly to the project’s launch.
$529 million is the value of ICE’s contract with GEO Group to operate the new detention center, while Highlands profits as the property owner rather than the operator.
Highlands REIT also owns several apartment buildings in Denver, extending the financial reach of immigration detention profits beyond the prison operator to a broader local landlord.