IRA Capital Acquires KinderCare Portfolio for $16.4M
IRA Capital is pleased to announce the recent acquisition of a NNN portfolio of five freestanding KinderCare Learning Centers located in Colorado, Florida (2), Illinois, and Maryland. The single-tenant properties were built between 2007 and 2009 and leased for an original 15-year term to KinderCare’s parent company Knowledge Universe Education LLC (“KUE LLC”). Kue LLC is the US’ largest privately owned early childhood education (ECE) provider with more than 1700 facilities generating more than $1.43 billion in 2013.
The acquisition of the KinderCare portfolio provides the opportunity to own 5 well-located, high quality assets, at a discount to current market valuations. IRA negotiated a portfolio purchase price of $16,420,000, which is a significant discount to the seller’s asking price of $18,500,000 and approximately 15% lower than where similar properties are expected to sell for an individual basis. All properties have absolute net leases (NNN) with no landlord responsibilities. There are approximately 9.25 years remaining on each original lease term. Each of the leases has rental increases of approximately 7.0% every 5 years. The number of children under 5 years old is expected to increase 8 percent between 2010 and 2020. The U.S. child care services industry has a combined annual revenue of $20 billion.