Serafin Real Estate's Leadership Position in the Childcare and Education Real Estate Market Continues to Deliver Clear Benefits to Investors and Owner-Users in 2021 and Beyond
Northern Virginia residents' demand for high-quality childcare and education facilities is strong and continues to grow. The demand is met by investors, who own the real estate, and by tenants and user-owners who deliver the care and learning experience.
Joe Serafin's mission-based strategy has rocketed his company to the forefront of this niche market in Fairfax, Loudoun, and Prince William Counties. Since 2019, Serafin Real Estate has closed over $45 million in childcare real estate sales. This number equals approximately 95% of the total childcare and education sector's business in the local area.
The majority of the transactions were for investors looking for a stable, long-term income source and businesses operating in preschool, childcare, and Montessori Education.
Northern Virginia is drawing in well-educated and well-paid professionals who want the best for their children. That simple fact is driving the demand for the right properties in the right locations. Properties must be conveniently located and must meet construction and design standards, firstly to facilitate high-quality childcare and then to encourage maximum learning once a child has graduated pre-school.
Serafin Real Estate is enabling childcare and education providers to meet that demand. Serafin's role is critical for success. Joe Serafin said, in a recent interview, that his company performs three primary roles. The first is to market listed properties to target-specific business profiles and locate ideal potential buyers or lessees to maximize seller return. The second role is the reverse; to execute in-depth consultations with the investor stakeholders and research the relevant micro-market to locate the most appropriate building or parcel that will meet the buyer's needs. The third is to manage negotiations, so the parties reach a mutual agreement.
Joe Serafin
Joe has been involved in real estate since 2004 when he began helping his family with their local real estate development business in Fairfax, VA. Forwarding through the years since, he has created a solid foundation through his representation of many developers, private equity firms, and individual investors and has successfully closed over $500M of transactions since his start in the industry. Serafin's specific areas of expertise are firmly based on strategic planning, investment analysis, and financial structuring. Joe decided to specialize in targeted niche marketing and founded Serafin Real Estate in 2019. As he grew his company, he focused on specific markets and specific industries. He and his colleagues looked closely at the childcare and education sectors.
“I helped a client, now a close friend, years ago with a land purchase, not knowing that he was the owner of several Class A, top-of-the line child care centers around Loudoun and Fairfax County. Trust, credibility, and a friendship was made on that land purchase, and he asked me if I wanted to help him with some of his other properties. He is an investor and was interested in selling those NNN childcare properties so he could do a 1031 into other investment and development properties. I learned a lot from him and this experience, and used the success of selling these several schools to meet other childcare center investors and owners in the area. One thing led to another, and now it is a strong niche market for us that we deal day-in and day-out.”
As more and more childcare investors and owners noticed the successful transactions, Joe dived even deeper in this specialty niche. It has developed into Serafin becoming known as The Childcare Center Broker in the local area.
Philosophy, Vision, and Demand
Serafin Real Estate's philosophy, Virginia's educational vision and principles, and parental demand for high-quality care and learning all interlink. Serafin's 'consult, target, and deliver' are mirrored by Virginia's mission for education. That mission is based on five principles: childcare and learning must be equitable, family-focused, high quality, strategic, and innovative. The relative wealth of many parents results in their seeking, not only public but, increasingly, private facilities.
Fairfax, Loudoun, and Prince William Counties
If we look at Fairfax, Loudoun, and Prince William demographics, we see why the demand is there and why it continues to grow. Northern Virginia's employment increased 7.91% between May 2020 and May 2021, and the Commonwealth's real personal income increased 12.97%. If we look more closely at the three counties, we see a clear picture.
All three counties have a high-earning population of well-educated parents in dual-income households. Loudoun has the highest median income in the US and is rated as the top location for households with earnings of $142,000 and over, who are aged between 25 and 34 years.
60% of adults living in Fairfax County have a bachelor's degree or higher. Its key industries are data analytics, aerospace, and cybersecurity. The number of people employed in these sectors is four times the national average. 8,700 tech companies are based in the county, and approximately 33% of these companies employ people in their twenties and thirties.
Prince William County's stats tell a similar story; almost 42% of residents have at least a bachelor's degree, 67% of residents occupy white collar jobs, and the median annual income is just over $107,000.
Northern Virginia is the base for many hi-tech businesses, as well as local and federal government departments. Many businesses are Fortune 500 companies or the US-based arms of international corporations, as well as local companies. Last year, the total outbound Virginia trade was $277 billion, and it is forecast to rise to $296 billion over the next four years.
Prestigious universities and well-respected colleges in and around these three counties include the University of Virginia, James Madison University, George Mason University, and Virginia Tech.
Serafin Summary Comment
Joe explained that the influx of new residents to meet the demand for well-qualified staff has raised the median annual income to an average of $123,355 across the three counties. With many families enjoying two incomes, a growing economy, and planning to send their children to one of the impressive tertiary education establishments, it is clear that the demand for high-quality childcare and private education institutions has a firm foundation and a very bright future.
Recent Childcare and Educational Institution Transactions
Having briefly discussed Northern Virginia's demographics, economy, and parental demand, Joe provided some examples of Serafin's closed transactions which propelled his brokerage to its current position. The following acts as both examples to help investors see possibilities and for users to consider expansion opportunities.
There were three contracts in Chantilly; A Montessori school was sold for $3,350,000 with a 7.3% Cap Rate and a preschool property sold for $7,980,000 (Cap Rate 6.75%.) Both enjoy long-term NNN lease agreements, generating stable investor income. The third Chantilly property was a 9,893 SF Montessori school bought by an owner-user for $4,650,000.
An owner-user purchased an almost 5000 SF building for preschool in Purcellville for $1,425,000. In Ashburn, a Montessori school with a NNN tenant was sold for $11,100,000, with a Cap Rate of 6.79%. Another NNN lease Montessori school in Herndon was bought by a passive investor for $4,200,000. Finally, two preschools were bought in Sterling, one with a NNN tenant, and the other by an owner-user for $1,100,000 and $2,175,000 respectively.
Other properties in Northern Virginia have changed hands for between $700,000 and $11.1 million. The spread indicates that different properties to meet different user needs are available, whether it is for educational counseling, full childcare, or school-based education.
Choosing to purchase the right property for purpose, in the right location to easily meet parental demand, and on the most appropriate terms requires using the services of a professional and expert brokerage.
It is, perhaps, appropriate to end this section with another client who commented: “This brokerage is refreshingly unique, in that they approach transactions as invested partners, rather than as a disinterested intermediary.”
Final Comment
If you intend to maximize the value of your investment portfolio, discussing strategy and objectives with Joe Serafin is a sensible place to start. If you own a childcare center, either as an investor or owner-user, and want to discuss the value of your real estate in today's Northern Virginia market, please contact Serafin Real Estate to arrange an initial consultative discussion. You can reach us at (703) 261 4809 or click this link to leave a message and we will get right back to you.
NB: Links Used for Stats
1: https://wp24.cryscampus.com/serafinre/2020/03/05/sresalesvolumefirstyear/
2: SRE Recently Sold Childcare Centers.pdf
3: https://www.vecf.org/wp-content/uploads/2019/08/DRAFT-Virginia-Strategic-Plan-PDGB5_For-Feedback.pdf
4: https://biz.loudoun.gov/information-center/education/
5: https://biz.loudoun.gov/information-center/demographics/
6: https://www.fairfaxcountyeda.org/
7: https://www.fairfaxcountyeda.org/key-industries/
8: https://www.zoomprospector.com/edos/prince-william-county-department-of-economic-development/339