Child care centers are finally pre-COVID occupancy levels. National groups (KinderCare, Learning Care Group, The Learning Experience, Goddard, Primrose, Kiddie Academy, etc.) have been a beneficiary of mom an
d pop centers closing due to wage inflation and higher costs to operate.
Furthermore, over the past 3 years, tuition rates for the child care industry have increased by approximately 25%, the largest increase in such a short period of time. Additionally, grant funding for schools represented an approximately 15% increase in revenue for individual schools. This increase did not come without risk to the industry:
• Wages increased by approximately 15-20% and there is higher turnover than ever
• New construction costs increased by approxiamtely 35%
• Grant funds from 2021 and 2022 will dry up and most likely not renew
Historically a recession resistant industry, the child care industry may even have some benefits from an economic recession in 2023 or 2024. Wage growth may finally stabilize, albeit tuition rates may also plateau. Payroll turnover will slow down decreasing payroll costs, and parents will overall be more satisfied with the care they are receiving increasing a school’s customer lifetime value.
The industry has undergone a significant transformation that hasn’t been seen in decades. To be effective in this market, you need specialists in the child care industry. Future In-Site Realty Associates, Inc., has a proven track record nationwide:
• Over the last 30 years, Future in-Site Realty has developed 20 schools from the ground up
• In the past few years alone, we have leased an additional 30 schools.
• Since early 2000, we have operated two Tutor Time Child Care Centers for 18 years.
As a family business, we established a niche in the child care industry. My wife, Debbie, has operated both schools as a Business Manager and franchisee. With an average enrollment of 350 students, we knows the ins and outs of successfully running a child care business. We are experts at negotiating child care sales and working with buyers interested in a 1031 Tax Exchange from California to Florida through our national brokerage network. When you're in the market to buy, sell or renegotiate your child care facility in any State, we would like the opportunity to earn your business.
The following pages have a list of for sale centers, and comparable sales nationwide for large facilities (over 6000SF).
If you have any questions or would like a broker price opinion for the property you're selling or thinking about buying, please reach out.
Sincerely,
Alan Stahl
818-917-7723
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