Real Estate Services

Site Selection and Development Site selection is the process of identifying and evaluating prospective parcels near residential subdivisions, in office parks, and along traffic corridors with commercial users, for the purpose of constructing new early education facilities. Optimal sites exist in areas zoned for commercial development and can include greenfield sites (land not previously used except, perhaps for agriculture or forestry) and brownfield sites (land previously improved with houses or commercial buildings). Site selection involves the analysis and understanding of demographic information, traffic patterns, zoning and development regulations. Development is the process of getting the parcel approved for an early education use (called “entitling”) and constructing the site and building improvements on it.

Financing and Sale Leaseback Transactions Arranging a loan for an early education facility requires finding a lender willing to loan on a special purpose property in their geographic market. Lenders, which include banks and other sources of financial capital, carefully weigh the risks of the tenant or education provider by evaluating their experience, scope of operations and financial performance. Sale-leaseback transactions involve the current owner of the real estate who desires to sell the property, but not the business and continue to occupy the premises under a lease agreement with the new buyer of the property. Sale-leaseback transactions allow the owner of a business and associated real estate to raise cash through the proceeds of the real estate sale and re-invest the funds in additional business opportunities or capital improvements.

Asset Management and Advising Multi-site owners of real estate have unique needs for maximizing the value of their real estate portfolio. Asset management involves understanding the life cycle of properties and tax consequences and benefits of different ownership structures and maintaining a plan for timely acquisitions and divestitures. Asset management is not the same as property management, which entails leasing, maintenance, and day-to-day oversight of properties.

1031 Tax Deferred Exchanges The exchange of certain types of property, like early education properties held for investment may defer the recognition of capital gains or losses due upon sale and therefore defer any capital gains taxes otherwise due. 1031 refers to that section of the IRS tax code. Using this tax strategy, a seller can dispose of his or her investment property and acquire another more expensive property.

Acquisition Due Diligence Due diligence is the process of doing your homework in advance of a purchase, whether for business and real estate transactions. Any sophisticated real estate purchaser should carefully confirm zoning, permitted uses, development regulations, and matters of title and flood insurance. In addition, prospective purchasers may want to conduct environmental, soil and building inspections to identify areas of concern that may impair the expected use and ability for a lender to provide financing.

Sales of Net-Leased Child Care Facilities and School Investment Properties Many early education facilities are not owned by the parties which operate the business within them. Instead, the real estate is owned by third-party investors who desire to own such an asset and derive rental income from it. These leased properties are routinely bought and sold by sophisticated investors looking for diversification in their financial portfolios. Child care facilities and school investment properties are widely thought to be recession-proof assets and the businesses operating in them are easily understood by most investors which helped to reduce risk.