Why So Many Early Education Concepts Are Eyeing Big D.C. Expansions

An incoming surge of education-based concepts could create new demand for retail, office and industrial space in the D.C. region. 

At least three companies that provide educational services through franchising models are looking to grow their D.C.-area footprints, and each concept could bring demand for a different type of real estate. 

Lightbridge Academy is looking to open between seven and 10 D.C.-area locations over the next three years, Lightbridge Chief Development Officer Mark Mele told Bisnow. Lightbridge provides five-day-a-week preschool education for children from 6 months old to kindergarten. It typically opens retail locations of about 10,500 SF that fit about 165 children and 40 full-time and part-time staff members, Mele said. 

When searching for expansion markets, Lightbridge looks at demographic trends and examines the supply-demand landscape of a market to find areas where similar concepts have long waiting lists, Mele said. 

"Income levels in and around the D.C. Metro area are high, and population density is on the move, too," Mele said. "The waiting lists, the income levels and the population statistics of families with children from less than 1 year to 5 years are very high and continuing to grow."

Lightbridge opens locations through franchise agreements, and it is already in talks with two potential franchise operators for the D.C. area, Mele said. It is looking largely at suburban areas in Montgomery County, Prince George's County and throughout Northern Virginia, he said. 

FranNet D.C. Market President Heather Rosen, an expert in the franchising industry, said she sees growing demand from early childhood education concepts like Lightbridge, and the only impediment is finding large enough retail spaces. 

"I think they are all looking to expand," Rosen said. "The challenge in the area with the early childhood business is they need so much real estate, they're pretty big locations."

Because of the challenge of finding real estate and the relatively large investment required from franchisees — early childhood centers tend to cost about $800K to open, she said — she expects more growth to come from another sector of the education space: tutoring.

Tutoring centers require smaller investments of as little as $100K to open, Rosen said, and they typically can open in vacant office spaces, which are cheaper and easier to find than prime retail locations.

"There is no shortage of demand for early childhood and no shortage of demand for tutoring," Rosen said. "I think where you're going to see more growth because of the real estate challenge and the cost challenge is in tutoring."

At least one nationwide tutoring company is seeking to grow its D.C.-area presence. Sylvan Learning is looking to open four to five D.C.-area locations over the next three years, said Georgia Chasen, Sylvan's vice president of franchise development. It costs up to $160K for franchisees to open a new Sylvan Learning Center, Chasen said, and they typically occupy spaces of at least 1K SF in retail or office buildings. 

"Office space is an option for our franchisees because Sylvan is a destination business," Chasen said. "There may of course be walk-ins, but more likely this is a planned visit."

The company considers factors such as median family income, population of school-age children and transportation access when seeking out new locations. Sylvan currently has centers in Alexandria, Falls Church and Reston, and Chasen said it is looking to grow throughout the suburbs and D.C. proper. 

"We certainly have opportunities for the outskirts in Virginia in Maryland, but we think there is a lot of strong potential in D.C. itself," Chasen said. "We see pent-up demand when we receive inquiries from students that are actively looking for a Sylvan Center."

A third type of childhood education concept is creating some demand for industrial space. The Mad Science Group provides educational workshops for after-school programs, summer camps and birthday parties.

The company's first concept, Mad Science, provides science-based programs. Last month it launched an arts-focused program in a partnership with Crayola, and it is looking for franchisees to expand the arts education concept. It has set a target of opening 10 franchise locations around the U.S. this year, Mad Science Group President Shafik Mina said, including two to three in the D.C. area. 

The company's franchisees lease industrial spaces of around 2K SF to 3K SF that act as a home base for them to store equipment and provide training for the traveling education classes. The locations tend to be centrally located and near major highways and universities, as Mad Science often recruits college students for part-time instructors. 

Mina said D.C. has been the most successful market for the Mad Science brand, and he sees it as a prime region for the growth of the new arts academy concept. 

"It has the right mix of urban density within a small area so we don't have to travel too far to get to the customer," Mina said. "And families in Washington put a high premium on education of their children."

The demand for private educational classes to supplement traditional school time has been growing around the country as public schools face shrinking budgets, he said. 

"Schools appreciate us, because what's happening, unfortunately, is schools are getting squeezed more and more and asked to do more with less, so they see us as a welcome respite," Mina said. "We can come in and help support their mission and goals and give them a breather."

Many D.C.-area school systems are experiencing overcrowding. Montgomery County's school system is growing by about 2,500 students every year, and half of its 205 schools exceed 100% capacity, the Washington Post reported last year. The county has begun instituting moratoriums on new development until new school space is constructed. 

Rosen said this is also the case in her home of Fairfax County, where she said a lack of funding to handle school overcrowding is forcing children to take classes in trailers. She sees this as a major driver for the tutoring business, as parents increasingly supplement their children's standard education with private tutoring to help them compete for the top colleges. 

"Public schools are starved for funds; you've got kids learning in trailers," Rosen said. "Schools are not being able to meet the need and kids are feeling pressure from parents and themselves to get into great schools. I just feel like if tutoring didn't do well in D.C., it wouldn't do well anywhere."