Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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284 • SHOPPING CENTER BUSINESS • MAY 2015 Randall Shearin Primrose Schools uses spaces that shopping center owners often can't. Smart Tenant R etail developers and owners have been known to be creative when divesting of real estate that doesn't quite fit the use for mainstream retailers and restaurateurs. With the proliferation of alternative tenants like healthcare and service providers, many owners have opened their eyes to alternative users that also do well in retail locations. For Primrose Schools, shopping centers and other well-located properties have been on the radar screen for quite a while. The premium childcare brand, which grows through franchising and assists in site lo- cation, has used remnant land adjacent to shopping centers, office buildings, former bank branches and other buildings to lo- cate its pre-schools. Shopping Center Business recently met with Bill Pierquet, senior vice president of school development for Primrose Schools, at the company's main office in Acworth, Georgia, near Atlanta. Primrose Schools was started by Paul and Marcie Erwin in Marietta, Georgia, in 1982. Like most pre-schools then, it had a half-day program and started as a daycare for 3- and 4-year-olds. As time progressed, the couple realized that more parents were working and the demand for full-day childcare was needed. They wrapped child care services around the educational component of the school. "The heart of Primrose, from the be- ginning, has been its research-based ap- proach to early education," says Pierquet. Primrose began expanding in the late 1980s by franchising. Because of the hands-on approach that Primrose likes franchise owners to take — all but one are independently owned and operated — most franchise owners own only one or two locations. Many times a husband and wife team will open one location and later will start a second school. About 70 percent of franchise owners have previ- ous experience with the brand, as parents whose children attended a school, as employees, or through relationships with former Primrose students, and became owners after seeing the high-quality care and education the children received. "Our model was created so that a fran- chise owner can own one or two schools and do very well. We want our operators to know every family they serve person- ally so that they are en- gaged," says Pierquet. The Primrose fran- chise agreement provides for the development team to locate the real estate and manage the site de- velopment process. This includes managing the architecture, engineer- ing, and permitting of the site. Once the property is purchased or leased by the franchise owner, the architect and contractor manage the construction process. About 90 per- cent of schools are on purchased land, while most leases are in urban locations. When Primrose began to expand, it looked for subdivisions and growing suburbs to locate its schools. When it first went to Texas, it sought out master planned community developers for on-site schools. "Our intention is to be everywhere we can be to serve parents and children in need of premier early education and care," says Pierquet. "We find opportuni- ties to build schools with franchise owners who share our passion for children and early education and who live and work in the communities where they are op- erating. Primrose is a community-based operation." Primrose's model is to serve children six weeks old through kindergarten. The school also offers after-school programs for older children, making it easier for parents to drop and pick all their chil- dren up in one place. Each of the schools serves about 200 children. Today, many families are choosing to stay in place versus move, and families are also choosing more urban lifestyles. Primrose's growth strategy has adapted to Primrose typically prefers to build schools from the ground up. Pictured is Primrose School of Georgetown in Austin, Texas. The Primrose School of Preston Hollow, in Dallas, was created by converting a former bank building.

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