Hanley Investment Group has announced the US $6.1 million sale of a newly constructed single-tenant childcare facility leased by The Learning Experience in Elk Grove on the outskirts of Sacramento, California.
Group’s Executive Vice President and Partner Jeff Lefko and Executive Vice President Bill Asher represented the seller, Armstrong Development Properties, Inc., a private developer based in the Pittsburgh metro area. Mason Canter of The Mason Canter Group of Los Angeles represented the buyer, a private investor based in the Sacramento area.
The property’s prominent location, coupled with its long-term lease and unique guaranty, made it an attractive investment for the buyer…
The 9,990-square-foot building, completed in 2022, is located on a 0.99-acre parcel at 8330 Elk Grove Florin Road at the busiest retail intersection in Elk Grove. The property is positioned in a growing and affluent area and features a new 17-year corporate lease with 6% rent increases every five years throughout the base term and option periods, along with a US $1 million corporate guaranty—double the average guaranty for The Learning Experience.
Childcare is a resilient and growing industry, with more than 18 million children in daycare weekly and revenues projected to grow from US $57 billion to $62.1 billion over the next five years, according to industry reports. Rising childcare costs, an increasing number of working mothers, and the recognized importance of early education are driving sustained demand for quality childcare services.
“The property’s prominent location, coupled with its long-term lease and unique guaranty, made it an attractive investment for the buyer,” explains Lefko. “Investor interest in high-quality, net-leased childcare facilities remains steady in areas like Sacramento and its affluent suburbs.”
The Learning Experience operates more than 450 centers nationwide, with plans to open 75 to 100 annually. The Elk Grove facility is operated by the chain’s largest franchisee, who purchased the business at this location last year and now owns more than 20 centers. The Learning Experience has demonstrated a 99% success rate in opening new locations, making it a compelling tenant for net-leased investors.
The property benefits from its strategic position near Highway 99, accessible via two signalized intersections. Notable retailers in the area include Safeway, Starbucks, Walgreens, and Kohl’s. Within a five-mile radius, there are more than 295,000 residents and 91,000 households, with average household incomes exceeding US $110,000 within one mile.
The transaction closed just 45 days after opening escrow, highlighting the efficiency and attractiveness of the deal.
“The strong demographics in Elk Grove, including a significant number of young families, reinforce the long-term growth potential for childcare facilities like The Learning Experience,” Lefko adds.
Elk Grove, located 15 miles south of Sacramento, is a family-oriented community with award-winning schools, well-maintained parks, a historic district, and a variety of dining and retail options. The area is home to major employers such as Apple, Kaiser Permanente, Frontier Communications, and ALLDATA.
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