KinderCare Learning Companies restructures master lease on 545 centers, extends longest term to 2042

In focus for $KLC: an August 11 restructuring of the master lease covering all 545 childcare centers operated by KinderCare Education LLC, the company's wholly-owned operating subsidiary. The Amended and Restated Fifth Amendment to the agreement with landlord KCP RE LLC staggers expiration dates across six site groups and raises the rent-escalation ceiling from 10% to 12.5%, a change that feeds directly into the company's long-term cost structure. The definitive agreement is filed as Exhibit 10.1 to the Form 8-K dated August 14, 2026.

The document supersedes a Fifth Amendment signed April 8, 2026, which was conditioned on the landlord's repayment and release of a mortgage loan covering the sites. Before that condition was satisfied, the parties executed the current A&R Fifth Amendment, effective August 11.

The amendment divides the 545 sites into six schedules. Thirteen sites on Schedule 1 were transferred to a landlord affiliate, KCP RE II LLC, under a new master lease running through December 31, 2029. The remaining five schedules stay under the amended agreement with KCP RE LLC, with expirations in staircase fashion: 51 Schedule 2 sites in 2033, 37 Schedule 3 sites in 2036, 177 Schedule 4 sites in 2038, 237 Schedule 5 sites in 2040, and 30 Schedule 6 sites in 2042.

Extension options and rent adjustment dates

Extension rights attach to the three longest-dated schedule groups. Schedule 4 (177 sites, 2038 expiry), Schedule 5 (237 sites, 2040 expiry), and Schedule 6 (30 sites, 2042 expiry) each carry one five-year extension option, but the option must cover all sites within the schedule. Schedules 2 and 3 carry no extension rights.

Rent adjustments follow a common first trigger. Every schedule includes an adjustment date of August 1, 2030. Schedules 3 through 6 add August 1, 2035, and the two longest-dated groups, Schedules 5 and 6, include a third adjustment on August 1, 2040.

The escalation cap and what to watch

On each of those adjustment dates, the "Escalation Percentage" is the lesser of 12.5% or the applicable "Index Increase." The prior version of the agreement had set that ceiling at 10%. As sites expire or are removed, the annual rent payable reduces by the amount allocated to each departing site.

The full text of the A&R Fifth Amendment is on file as Exhibit 10.1 to the August 14 Form 8-K. Certain schedules and exhibits to that agreement have been omitted from the public filing under SEC rules and will be furnished to the Commission on request.