The Learning Experience TENANT OVERVIEW


Pros

  • Typically strong site selection within densely populated neighborhoods
  • Popular and well regarded concept
  • 10%+ rent increases every 5 years
  • Fastest growing child care and early education franchise in North America
  • Tenant responsible for RE taxes, insurance, and most expenses

Cons

  • Individual operators
  • Lease carries landlord responsibility for roof and structure
  • Private company

Tenant Description

The Learning Experience (TLE) is a tenant within the niche net lease market of daycares and early learning academies. TLEs tend to be located in areas with a dense population and high average household income. TLE buildings are typically 11,000 square feet with a play yard. TLE leases are landlord friendly and require the tenant to pay insurance, real estate taxes and all utilities and the landlord is responsible for the roof and structure. The initial term of a TLE lease is 10 to 15 years with structured increases of 10-12%, every five (5) years. Commonly TLE leases will carry a limited corporate guaranty. This guarantee lasts for the first five (5) years of the lease and provides a safety net while the operator is focusing on growing enrollments and establishing TLE within the community.

The Learning Experience began its operations in 1980 in Boca Raton, Florida operating under three fundamental principles; learn, play, and grow. In July 2018, TLE was acquired by Golden Gate Capital. Today, there are over 300 TLE locations operating or under development across 22 states. TLE’s proven record of success, more than 95% of their pre-school graduates can read before kindergarten, has been a key driver for strong enrollments.

Average Cap Rate
6.75%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $4,237,900
NOI $296,581
$/Square Foot $385
Building SF 11,000
Lot Size 1.0 - 2.0 Acres
Lease Term 10 - 15 Years
Escalations 10 - 12% Every 5 Years
Stock Symbol N/A
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
7.28%
2018
7.06%
2019
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Fort Lauderdale, FL 6.75%
Exton, PA 7.50%
Chelmsford, MA 7.30%