Investment Overview

Licensed Preschool Business and Real Estate | High-Capacity Facility in an Affluent Infill Market

This offering consists of the sale of a licensed preschool business together with the underlying real estate. The property and business are being sold as a combined acquisition, providing operational control, financing flexibility, and long-term asset security for the buyer.

The facility is located along a high-traffic corridor within a highly desirable Southern California community known for strong household incomes, limited developable land, and consistent demand for early childhood education. While current enrollment is below licensed capacity, the asset presents immediate upside for an experienced operator capable of stabilizing enrollment and modernizing the facility.

Licensed Capacity and Program Mix

• Total licensed capacity: approximately 89 children
• Preschool: 69
• School Age: 20

• Current enrollment: approximately 20 children
• School-age license is currently underutilized
• No infant program

The licensing profile allows a buyer to significantly increase enrollment using existing approvals without expanding the physical footprint of the property.

Property Overview

• Building size: approximately 4,500+ square feet
• Land size: approximately 0.56 acres
• Construction: single-story structure
• Zoning: educational use with flexibility for other commercial applications
• Outdoor play areas sufficient for licensed capacity
• On-site parking with efficient drop-off and pick-up flow

The land component is a critical value driver. Comparable child care facilities in the region are typically located on much smaller parcels, making replacement of this asset under current zoning and entitlement constraints highly unlikely.

Business Overview

• Operating history of over 20 years
• Strong local reputation and top-tier online reviews
• Private-pay revenue model
• Current performance impacted by increased competition, public TK expansion, and deferred facility upgrades
• Significant opportunity to reposition the business through refreshed branding, marketing, and facility improvements

This is not a distressed operation, but rather a legacy business that has not been optimized for modern market conditions.

Financial Position and Buyer Lens

From a buyer, lender, and appraiser perspective, this acquisition should be viewed as a real estate-led transaction with business upside, rather than a stabilized cash-flow business at closing.

Key considerations:
• Current business cash flow alone does not support full acquisition debt service
• Real estate value anchors the transaction
• Enrollment recovery and tuition normalization drive post-acquisition upside
• SBA financing is viable for experienced operators with appropriate equity

This structure is common in today’s child care market, particularly for legacy facilities transitioning ownership.

Valuation Framework

Business Component
• Supported by licensed capacity, historical performance, and upside
• Current valuation reflects underutilized enrollment
• Growth driven by enrollment ramp and operational optimization

Real Estate Component
• Supported by comparable educational and special-use sales
• Premium attributable to location, parcel size, and zoning
• Long-term appreciation independent of business performance

Combined Value Thesis
• Pricing reflects current as-is condition
• Upside supports long-term value creation
• Aligns with SBA and appraisal methodologies when underwritten properly

Upside Opportunities

• Increase enrollment toward licensed capacity
• Activate school-age program
• Refresh facility to improve parent appeal
• Adjust tuition to market levels over time
• Implement modern marketing and lead management
• Optimize staffing ratios as enrollment grows

Ideal Buyer Profile

• Existing child care operators seeking expansion
• Owner-operators wanting real estate control
• Groups consolidating multi-site platforms
• Buyers comfortable executing enrollment recovery strategies

Investment Summary

This acquisition offers a rare combination of licensed capacity, land value, and long-standing community presence in a market where new child care development is increasingly constrained. While current operations reflect underutilization, the asset provides a clear and executable path to stabilization and long-term value creation for the right buyer.