Northmarq, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a single-tenant property portfolio triple net leased to The Learning Experience (TLE). Brandon Duff and Matt Spangenberg of Northmarq exclusively marketed the portfolio on behalf of the Chicago, Illinois and Atlanta, Georgia-based seller. Milo Spector of Northmarq represented the purchaser, a San Francisco, California-based 1031 exchange buyer, who paid approximately $9.83 million. This transaction represents the sixth and seventh unique TLE properties sold by the firm in the past 10 months.
“We have been aggressively focused on the early childhood education space for some time and been particularly successful driving transactional velocity with a growing concept like TLE,” said Brandon Duff, Managing Director and Partner in Northmarq’s Chicago, Illinois office. “The buyer pool continues to grow significantly for this niche property type, evidenced by multiple offers we have received from various buyer profiles on each early childhood education property offering that we have completed.”
“The limited corporate guaranty structure that TLE employs in its leases has historically been a challenge to overcome,” added Matt Spangenberg, Associate Director, also in Northmarq’s Chicago office. “However, we have been successful in explaining to investors the unique dynamic between TLE corporate and its franchisees, which incentivizes TLE to keep locations open regardless of its limited financial exposure. This, combined with educating investors on the value drivers of each specific property and bringing them up to speed on the early childhood education industry, has helped us drive significant value in the sale of these properties.”
Situated in the affluent Milwaukee, Wisconsin suburbs of New Berlin and Menomonee Falls, the locations were built in 2020 and represent two of the first three TLEs built in the state. Both locations are operated by one of the most successful franchisees in the TLE system and represent TLE’s aggressive push into Wisconsin as part of its ongoing expansion to more than 450 locations across the U.S.
“The buyer was an all-cash, 1031 exchange investor and repeat client of ours. We performed a national search for their replacement property, and they were attracted to these TLE properties due to the long-term leases, triple net structure, new construction and insight on the franchisee operating each of these TLE locations,” said Milo Spector, Director in Northmarq’s Walnut Creek, California office, who has a deep track record in the early education sector. “This is another excellent example of the internal network we have at Northmarq and the collaborative platform adding value to both a seller and buyer in a transaction. This is particularly the case with our already established presence in the early childhood education space, as we have existing relationships with the most active investors for this property type, combined with our real-time tracking of new active participants as well as private 1031 exchange buyers looking for these acquisitions nationwide.”