Target Hospitality enters five-year lease, services pact with CoreCivic

Target Hospitality (TH) announced it has entered into a five-year lease and services agreement with CoreCivic (CXW) to resume operations utilizing the company’s existing assets located in Dilley, Texas. These assets operated from September 2014 to August 2024 as the South Texas Family Residential Center, where Target provided facility and hospitality solutions to CoreCivic through a lease and services agreement. Upon reactivation the Dilley Facility will retain a similar facility size and operational scope as the prior operations. The Dilley Facility will be capable of supporting up to 2,400 individuals. The consistency of the community layout will require no capital investment. Target will provide facility and hospitality solutions to CoreCivic under the Dilley Contract, which has a similar economic structure to the company’s previous agreement with CoreCivic, including fixed minimum revenue regardless of occupancy. The Dilley Contract is expected to provide over $246 million of revenue over its anticipated five-year term, to March 2030. Target anticipates approximately $30M of revenue will be realized in 2025.