When Jay and Danielle Sunde expanded their network of preschools, daycares, and elementary schools across the Southeast, they made a structural decision that separates most commercial buyers from long-term operators: they bought the physical buildings alongside the businesses. Today, their education platform employs more than 70 team members and serves nearly 500 families, operating across properties that the founders own through a separate commercial and residential real estate portfolio.
Commercial Real Estate Leverage at Lease Renewal
For childcare centers and location-dependent businesses, moving is rarely a simple logistical hurdle. Families choose schools based on geographic convenience, and classrooms require specialized build-outs to satisfy strict state and local licensing mandates. Relocation disrupts operations, risks losing families who refuse to follow, and incurs substantial capital expenses. According to Jay Sunde, this vulnerability gives commercial landlords considerable leverage when leases come up for expiration.
An otherwise thriving operating company can face severe financial pressure simply because the business owner lacks control over the real estate beneath it. Acquiring the property eliminates that expiration risk entirely, turning a recurring vulnerability into a permanent operational asset.
Dual Equity Creation and Exit Strategy Options
Structuring the purchase so that the operating business pays rent to a separate entity owned by the same operator changes the mathematics of small business ownership. Sunde describes this approach as building equity in two places at once. The operating company generates ongoing cash flow while the underlying real estate accumulates value independently.
This dual-asset model also expands options when an owner eventually decides to exit. An operator can sell the business while retaining the building as a rental property secured by a known, established tenant, or market the operating company and the real estate together as a single package. Having that flexibility at the point of sale provides significant strategic value, Sunde noted.
Capital Allocation and Financing Real Estate Risk
Despite the advantages of property ownership, Sunde cautions against treating it as an absolute rule for every transaction. Tying up capital in real estate can drain funds that a new business owner desperately needs for payroll, emergency repairs, or expansion during the critical first year of operation.
Furthermore, if an operating business lacks stability, adding a commercial mortgage increases overall financial exposure rather than mitigating it. Sunde advises buyers to secure the operating company first and pursue the physical property only after the core cash flow fully supports it. When a seller also owns the underlying building, he suggests negotiating a long-term lease equipped with a purchase option, giving the operator immediate protection while buying time to prepare for a future acquisition.
Analytical Evaluation and Specialized Sectors
Drawing on an early career in financial analysis—where he produced forecasts for commercial, residential, and healthcare real estate—Sunde evaluates properties through the objective lens of a lender. He routinely analyzes what a building is worth independently of the tenant currently occupying it.
For buyers operating in location-dependent industries such as childcare, healthcare, and physical home services, Sunde’s core principle remains direct: the lease is an inescapable component of the transaction, and controlling the real estate is frequently the most robust defense an operator can secure.
