In this episode, Jonathan talks with Milo Spector about opportunities for investors with early childhood assets. The two discuss opportunities for value-add, what makes a good tenant, and due diligence items. Some blue-chip tenants in this asset class include Kindercare, Learning Care Group, Busy Bees, and Bright Horizons.

Connect with Milo:
https://www.linkedin.com/in/milospector/

Takeaways

• The early education asset class, which includes childcare and preschool centers, has gained increased interest due to its essential nature and the realization of its importance during the pandemic.
• Investors should consider the creditworthiness of the tenants, lease terms, location demographics, and financials when evaluating early education properties.
• Strong guarantors in the early education asset class include well-known operators like KinderCare, Learning Care Group, and Busy Bees.
• State programs that provide funding for early education can impact the demand for these assets, but it is important to consider the level of subsidy and the fit of the brand within the community.
• Investors should conduct thorough due diligence, including analyzing enrollment trends, property condition, and potential value-add opportunities.
• There is demand for vacant early education properties, especially from operators looking to expand their presence in certain areas.
• Investors should be aware of the nuances of debt financing in the early education asset class, including the prevalence of recourse debt and lower loan-to-value ratios.
• The future outlook for the early education asset class is positive, with increasing demand and potential for growth in certain markets.

Chapters

00:00
Introduction and Background

03:00
Defining Early Education Assets

04:17
Impact of the Pandemic on Child Education Assets

06:12
Increased Interest in the Early Education Asset Class

08:41
Nuances of Valuing Early Childhood Properties

10:45
Lease Expectations for Early Education Assets

12:08
Strong Guarantors in the Early Education Asset Class

13:48
State Programs and Their Impact on Child Education Assets

16:40
Due Diligence for Early Education Asset Investments

18:26
Value-Add Opportunities in the Early Education Asset Class

20:16
Demand for Vacant Early Education Properties

22:34
Analyzing Supply and Demand in the Early Education Market

24:30
Higher Barrier to Entry Markets and Potential Opportunities

27:37
Considerations for Debt Financing in the Early Education Asset Class

29:34
Future Outlook and Connecting with Milo Spektor

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*Some or all of the show notes may have been generated using AI tools.