|Address:||2025 Belbrook Ave.
Xenia, OH 45385
2013- New Roof
|Net Rentable Area:||4,700 square feet|
|Land Area:||.52 Acres|
KinderCare provides a range of child care services, including Early Education Programs, Infant Daycare & Early Education, Toddler Daycare & Early Education, Preschool Education, Prekindergarten Program, Transitional Kindergarten, Kindergarten, and more. KinderCare seeks to provide an appropriate form of child care and education to fit the needs of any family requiring child care services. KinderCare has a depth and a breadth of resources that is unmatched by its competitors.
Because of KinderCare’s size and reach, its employees have access to quality training. KinderCare child care centers devote more time and resources to teacher training than any other childcare provider. Twice a year they host the largest early childhood teacher training program in the country.
KinderCare has been operating at this location since 1979. There is a strong need for child care services in Xenia, Ohio, as 32.3% of Xenia’s over 10,000 households have children living with them.
The company traces its history to the late 1960s, when Perry Mendel, a real estate developer from Montgomery, Alabama, speculated that the increasing numbers of women entering the work force might prompt a rise in demand for preschool child care. Remarking on his inspiration, Mendel later recalled in a Management Review article that one morning as he breakfasted with a group of associates, he noticed a man “not in our group, who drove a Lincoln Continental and read The Wall Street Journal. … I asked my friends what he did for a living. They replied, ‘Nothing, but his wife has two daycare centers for children.’ That set off bells in my head.” Mendel reportedly began talking with the man and eventually purchased one of the two centers. New to the business, Mendel spent about a year researching the industry, touring child care centers across the country and reading up on state regulations.
Mendel discovered that many working parents insisted on more than just babysitters. Specifically, they wanted centers that provided individual attention, nutritious foods, exercise, and education. Thus, Mendel planned to open a facility in which children would not only be safe and loved, but would also learn. Prior to the opening of the first center, Mendel spent many months drawing up a detailed plan of how the corporation should function. His plan covered such details as classroom size and required length of naps. Moreover, Mendel sought out the advice of experts; nutrition experts from Vanderbilt University planned hot-meal menus, and education specialists developed learning programs. Tight quality-control measures were planned to ensure programs would be carried out as prescribed.
The company began as Kinder-Care Nursery Schools, and the first facility was opened on July 14, 1969. Accommodating 70 children, the center featured a distinctive exterior decorated with a Humpty-Dumpty motif and a red bell tower that would eventually be incorporated as the company’s logo. Future centers would adopt the readily identifiable exterior design, helping to create brand name recognition along the same principles developed by McDonald’s restaurants and Holiday Inn hotels. Unlike such popular chains, however, Kinder-Care discontinued the idea of franchising in 1970, when Mendel determined that most people interested in the child care business lacked the expertise or were unable to arrange the financing.
Nevertheless, the success of Kinder-Care was just as Mendel had envisioned; the demand was there and the company began to flourish. A second facility was opened within the year, and in 1970 the company changed its name to Kinder-Care Learning Centers, Inc. to better reflect its emphasis on education. By 1971, 19 centers were in operation, the first infant care was offered, and the company had extended its services to include transportation for those school-aged who needed it, via rented Volkswagen vans.
Expansion of the centers continued apace, as the company went public in 1972. Soon thereafter Kinder-Care established a new corporate headquarters in Montgomery and began to invest in television advertising. To help with the mass marketing of the concept, Mendel employed Richard Grassgreen, an IRS attorney and tax expert, whose financial knowledge and experience complemented Mendel’s marketing strengths. By 1974 there were 60 centers located in 17 states and over 500 employees nationwide. Growth prompted the company to divide its operations into six geographical regions, managed by regional directors, in 1975.
Continuing to expand the scope of their operations, Mendel began acquiring other child care center companies in the late 1970s. The company’s first major acquisition came in 1977, when it purchased the 15 facilities of Playcare. In 1979, as Kinder-Care celebrated its tenth anniversary, three more major acquisitions took place: Mini-Skools, Living and Learning, and American Pre-Schools. Moreover, the company opened its 300th center that year. Such activity prompted the national media to take notice of Kinder-Care; business periodicals began to feature coverage of the company’s rapid rise and founder Mendel even made an appearance on NBC’s Today Show.
While increasing its national presence, the company also focused on providing valuable programs for the children entrusted to their care as well as their employees. Kinder-Care began publishing activity books and calendars for children. Moreover, the centers established health and safety coordinators, an educational assistance program for employees, and Quality Focus, a program emphasizing quality and professionalism in child care. The KinderCare Kindustry centers, a child care concept first established at Walt Disney World and later renamed KinderCare at Work, were established either near companies or within companies to cater specifically to working parents. In 1985, Kinder-Care opened its 1,000th center. Competition in the industry was comprised chiefly of La Petite Academy and Daybridge/Children’s World, but neither approached Kinder-Care’s size.
In 1987, Kinder-Care was reporting annual revenues of $900 million, and analysts were remarking on the company’s rapid growth, observing that stock had soared from 12 cents a share to $20 at its high in mid-1987. Management Review magazine stated in a 1988 article that the investment community watched a $100 investment in the company’s stock in 1972 grow into $7,000 in 1987. In fact, during this time, Kinder-Care was expanding at the rate of one new center every three days.
This trend was soon to sour, however, as Mendel and Grassgreen began widening the scope of their plans for the company. Years before, the men had been approached by Michael Milken, an investor from the firm of Drexel Burnham Lambert, who suggested that the company begin diversifying its equity and building an investment portfolio. Toward that end, Kinder-Care acquired a wide variety of companies in the 1980s, including chains of photo studios, shoe stores, other retail operations, and two savings and loan associations. Late in 1987, Kinder-Care acquired Sylvan Learning Centers, a provider of supplemental instruction to children and adults, and the largest franchiser of its kind. The company also made a $10 million investment in Trans-Resources Inc., an Israel-based chemical and fertilizer manufacturer.
In a 1989 article in Business Week, one reporter noted, “Kinder-Care Learning Centers Inc., once a successful pioneer in day care, has become one of the most confused stock investments of the decade.” By this time, Kinder-Care stockholders and the banks that had lent it money were also sharply criticizing the diversification program, complaining that they had intended to invest in a day care operation and not the repository of other interests that now comprised the company. In fact, according to a 1988 Forbes article, less than half of Kinder-Care’s sales and profits for the year were expected to come from its child care centers. Moreover, investors now found that they held stock in a new company all together: the Enstar Group Inc., which was formed as a holding company during this time for Kinder-Care and the myriad other companies now associated with it.
With guidance from Drexel, Enstar had financed expansion by diluting its stock through public offerings and purchasing junk bonds. As a result, the company’s debt load increased from $10 million to about $620 million in 1988. While some of the money was used to expand the child care centers, much of it was used to make further investments, and following some initial pay-offs from the plan, the company found itself in deep financial trouble, particularly after the stock market crash in October 1987.
With declining stock prices and desperate for cash, Mendel and Grassgreen set up Enstar’s Kinder-Care division as a subsidiary and sold stock in Kinder-Care at $7 per share. Although the offering raised $42 million, Enstar’s debts remained exceedingly high. Next, Mendel and Grassgreen accepted a 1989 offer from the Lodestar Group, a New York investment banking firm, for a rights offering, in which shareholders would generate new equity capital through their purchase of Kinder-Care stock from Enstar at a discount price.
|Net Rentable Area:||4,700 s/f|
|Investment Strategy:||Buy and Hold|
|Hold Period:||7-10 years|
|Property Type :||Free-Standing Single-Tenant
6.85% Cash on Cash first 5 years
|Purchase Cap Rate:||8.19%|
|Projected Distribution Timing:||Monthly|
|Estimated Closing Date:||October, 2016|
Mr. Schwetz has managed, leased, and financed over 1 million square feet of retail real estate and has financed over $100,000,000 worth of commercial real estate. As a member of the International Council of Shopping Centers for the past 28 years, Mr. Schwetz holds the highest designation of CRX, Certified Retail Property Executive as well as a CSM, Certified Shopping Center Manager. Additionally he has been a licensed California Real Estate Broker since 1988.
JDS Real Estate Inc. leverages its extensive relationships with owners, lenders and listing brokers to access retail and single-tenant properties. Over 50% of previous deals and existing deals have been acquired through off-market or limited market processes.
Jason Schwetz is also the Founder, CEO and President of JDS Restaurant Group Inc. For over 24 years, JDS Restaurant Group Inc. has owned and operated Senor Grandes Fresh Mexican Grill located in Woodland Hills, CA. JDS Restaurant Group, created, built and operated 4 quick-service restaurants. Three of the four restaurants were sold between 1995 and 1997. The Woodland Hills location continues to serve delicious, fresh Mexican food.
When Jason is not working (which is rare) he is an avid hockey player, fan and coach.
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