Childcare and early learning facilities are often overlooked when franchisees or real estate developers look for investment opportunities. Often in favor of office, commercial, retail, and multifamily alternatives.

This is unfortunate, as many markets are underserved with a shortage of suitable childcare centers.

In a country where approximately 25 million children under the age of 6 have parents who both need to work, the need for affordable, well-designed childcare facilities will only continue to grow. That makes for an attractive opportunity to meet an urgent community need and make a profit at the same time.

As a childcare center developer, you will:

• Support children’s development. You’ll provide places for children to learn and explore, make friends, and get their first taste of independence. In addition, childcare centers offer essential educational and social opportunities for children who otherwise may not have access to them.
• Help communities thrive. Your childcare centers offer working families a chance to have their children cared for in a safe and stimulating environment while freeing up parents to work and contribute to the local economy.
• Support childcare providers as business owners. Your childcare centers will create jobs for childcare providers, allowing them to make a decent living while serving a critical community need.
• Add amenities and improve the marketability of your current assets. Childcare centers are great amenities for commercial and multifamily development. They provide crucial services that your tenants need and make your existing properties more marketable.

Trends in Childcare Center Development

Population growth is contributing to the need for high-quality, affordable childcare centers. Unfortunately, many “mom and pop” childcare centers did not survive the pandemic, with over 20% of them closing; there is currently a shortage of facilities. This has led to an increase in providers entering the market and the number of developers who are investing in and building these facilities.

There are several trends in childcare center development that are worth noting. Perhaps the most notable trend is the increasing demand for centers that offer before- and after-school care. This reflects that more and more working parents are relying on pre-kindergarten and after-school programs to care for their children.

Another trend is the growing demand for bilingual childcare centers. Many families want their children to be able to be immersed in a second language at an early age, and there is a shortage of bilingual childcare centers nationwide.

Finally, there is a trend toward using technology in childcare centers. This includes interactive whiteboards, apps that teach letters and numbers, and even virtual reality headsets. Technology can be a powerful tool for helping children learn and explore.

These and other trends all arise from recent findings about the inadequacy of the country’s childcare facilities. Incorporating them into future childcare developments will give the nation a fighting chance at building a better tomorrow.

Industry Averages

How much does it cost to build a childcare center? That will depend largely on the size, type, and business model of the facility you intend to build. Here are some rough estimates to give you an idea:

• For home-based startups: From $10,000 to $100,000
• For renovating an existing facility: $55,000+, plus $60 per child in supplies and equipment
• For franchises: From $300,000 to $7 million

How long will it take to build the facility? A minor renovation or fit-out might need as few as six months, while a new 10,000 sq. ft. facility (the national average) might need as much as 12-16 months after land entitlements.

Roll-out/Development Models

Real estate developers like yourself have many ways to contribute to the childcare and education space. Here are a few common ways that have proven to be successful:

Startups. People often start childcare centers in their homes by renting a room to a childcare provider—or creating a childcare service themselves. This can be a great way to get started in the childcare business, as it allows you to test out your business idea without making a significant financial investment.

Partnerships with public schools. Public schools are often in need of good-quality childcare centers. Developing a childcare center as part of or in collaboration with a public school can be a great way to ensure that the center is well-used and has a large potential customer base. Such childcare facilities also benefit from resources shared with the school.

Building your own tenant. It’s also a good idea to consider having a childcare center on the ground floor of your next multifamily, office, or commercial development. It will immediately have interested customers (parents who need to work during the day) and may offset development impact fees in certain municipalities.

Franchising. If you have the capital, franchising can be one of the simplest, easiest, and most straightforward ways to get into childcare center development. Once you identify a site that’s suitably sized and zoned for the facility, you’re good to go.

The Process

Once you’ve decided which rollout/development model to use, it’s time to build the business. There are three significant steps in the process:

Proforma. You make sure all the due diligence is done correctly. It’s essential to check the zoning regulations governing the land on which your childcare center will be located.

Design. Once you’ve done your due diligence and ensured your project is clear for takeoff, it’s time to design the facility. If you’re getting a franchise, the design elements will likely be already in place. Otherwise, your architect must make the following design considerations for your childcare center:

• Bathroom fixtures. They must be sized for children. Classroom sinks should also be considered.
• Bathroom locations. They are ideally adjacent to playgrounds and classrooms, so teachers can closely monitor activities within the bathrooms and teach children independence.
• Windows. Classrooms and common areas should have windows appropriately sized and located to let in natural light.
• Common areas. Consider having common areas located intentionally to encourage engagement and social development in children.
• Security. Ensure that escape routes are marked, hazardous materials are stored away from classrooms, and that security blind spots are nonexistent.
• Colors. The more soothing and familiar your color palette is, the better for the children.
• Outdoor spaces. Playgrounds are great ways to orient children to the outdoors, preventing the onset of negative behaviors.

Construction. Once the design has been finalized, it’s best to work with a construction team that can handle all the critical building systems. That way, the construction of your childcare facility will go as smoothly and quickly as possible.

Contact Us

Jarmel Kizel Architects & Engineers, Inc. is a well-known and highly respected architecture and engineering firm that has been in business for almost 50 years. During that time, we have completed over 400 projects in the childcare industry, and our work has helped countless child education businesses grow and succeed.

Do you have a childcare project in mind? Do you want expert guidance every step of the way? Contact us today at 201.376.0199, and let’s make it happen.