Your center can be valued as a business, as real estate, or as both. Understanding how buyers actually price each one helps you see the full number — and the best way to capture it.
The business: a multiple of real earnings
The operating business is typically valued on a multiple of normalized earnings (SDE or EBITDA). The multiple reflects enrollment stability, license capacity, growth, staffing, and how durable the cash flow is.
Buyers adjust out one-time items and owner perks to find sustainable earnings — which is why clean books, prepared in advance, directly protect your price.
The real estate: rent and cap rate
If you own the building, the real estate is valued on the income it can command — a market cap rate applied to the rent. Tenant credit, lease term, and rent coverage drive that cap rate.
When you own both the business and the building, the two valuations interact, and the optimal structure depends on which the market values more highly for your specific asset.
Why license capacity moves the number
One factor increasingly separates strong offers from weak ones: how many children your center is licensed to serve. Facilities licensed for 80 or more tend to draw the deepest buyer interest, because scale spreads fixed costs and improves financial resilience.
If your license is smaller, expansion potential — additional space, outdoor area, or room to add a license — can stand in for raw capacity and lift value.
Getting your highest total
The highest total value usually comes from structuring the sale thoughtfully: business only, real estate only, both together, or a sale-leaseback — based on who the buyers are and what they're paying up for.
We model these scenarios so you can see, in dollars, the best path to market before you commit to one.
Find out what your school is worth.
A confidential, no-pressure valuation from a broker who has owned, operated, and sold childcare centers for 30+ years.
