The Childcare Cap Rate Index
The only published quarterly series of childcare real estate cap rates — built from 592 actual center sales across 41 states, not surveys or estimates.
Childcare cap rate index — key figures
The median cap rate for childcare real estate in the United States is 7.28%, measured as a trailing four-quarter median through 2026 Q2, based on 146 childcare center sales that reported a closing cap rate.
Childcare cap rates expanded roughly 98 basis points between 2023 Q1 and 2024 Q4, moving from a 6.30% trough to about 7.28%. Since 2024 Q4 the trailing four-quarter median has held inside a seven-basis-point band for 7 consecutive quarters — expansion stopped rather than reversed.
The index is calculated from 592 sold childcare transactions across 41 states, compiled by Little Scholars Real Estate, a childcare-only brokerage led by Alan Stahl.
Source: Little Scholars Real Estate sold-comps database, updated June 2026. The trailing four-quarter median is published only where the window contains at least 20 reported cap rates. These figures may be cited or republished with attribution to Little Scholars Real Estate (CC BY 4.0).
Trailing four-quarter median cap rate
Each point is the median of reported closing cap rates across the four most recent quarters of sales. The rolling window smooths quarter-to-quarter noise; each point's sample count appears in the table below.
Cap rate expansion in childcare is over.
Between early 2023 and late 2024, buyers of childcare real estate repriced risk. The median cap rate moved from 6.30% to 7.28% — nearly a full percentage point. For a center with $300,000 of NOI, that 98bp expansion took roughly $640,000 off the value.
Then it stopped. For 7 straight quarters the rolling median has sat between 7.28% and 7.35% — a seven-basis-point band — while sample sizes grew from 71 to 146 sales. Stability that holds as the sample grows is not noise; it is a market that found its level.
For owners, this changes the arithmetic of waiting. Through 2023 and 2024, waiting cost value every quarter. Today the cost of waiting is your own operating performance — tuition, occupancy, lease term — not the direction of the market.
Quarterly series, 2022–2026
| Quarter | Sales | Quarter cap | Trailing 4Q cap | 4Q sample | $/SF | Rent/SF |
|---|---|---|---|---|---|---|
| 2026 Q2 | 28 | 7.38% | 7.28% | 146 | $310 | $25.34 |
| 2026 Q1 | 33 | 7.30% | 7.29% | 160 | $335 | $23.89 |
| 2025 Q4 | 54 | 7.29% | 7.29% | 149 | $312 | $28.06 |
| 2025 Q3 | 44 | 7.25% | 7.30% | 124 | $274 | $21.97 |
| 2025 Q2 | 71 | 7.48% | 7.35% | 112 | $311 | $24.80 |
| 2025 Q1 | 44 | 7.24% | 7.28% | 86 | $318 | $28.15 |
| 2024 Q4 | 49 | 7.36% | 7.30% | 71 | $347 | $27.86 |
| 2024 Q3 | 49 | 7.13% | 7.19% | 58 | $269 | $25.80 |
| 2024 Q2 | 15 | 7.25% | 7.04% | 43 | $306 | $30.41 |
| 2024 Q1 | 7 | 7.34% | 6.88% | 42 | $327 | $37.81 |
| 2023 Q4 | 15 | 7.00% | 6.87% | 47 | $385 | $28.00 |
| 2023 Q3 | 21 | 6.90% | 6.80% | 45 | $344 | $29.81 |
| 2023 Q2 | 15 | 6.58% | 6.42% | 48 | $306 | $30.62 |
| 2023 Q1 | 18 | 7.10% | 6.30% | 54 | $343 | — |
| 2022 Q4 | 32 | 6.54% | 6.40% | 59 | $352 | — |
| 2022 Q3 | 34 | 5.50% | — | — | $378 | — |
| 2022 Q2 | 30 | 6.60% | — | — | $400 | — |
| 2022 Q1 | 28 | 6.63% | — | — | $430 | — |
How to cite this index
This index is published under a Creative Commons Attribution 4.0 license. You may cite, republish, chart, or build on it — commercially included — as long as you credit Little Scholars Real Estate and link to this page. No permission needed; a copy of what you publish is always welcome.
How the index is built
Universe
592 childcare real estate sales across 41 states, closed 2022 through 2026 Q2, compiled from public records. Childcare only — no general-purpose retail, no repurposed buildings.
Measure
Median, not mean. Medians resist the single-asset outliers that distort averages in small datasets.
Window
A trailing four-quarter median, published only where the window holds at least 20 reported cap rates. Single-quarter medians are shown too, but they are noisier.
Limits
Not every sale discloses a cap rate; 146 in the current window do. Early 2024 quarters carry smaller samples. The index measures the market in aggregate, never a particular property.