Dive Brief:

• According to a new report from the Wall Street Journal, some real estate investors have turned their focus to the charter sector, where private operators are seeking spaces for their new schools.
• For example, Northstar Commercial Partners aims to raise $100 million to invest in converting vacant spaces in office buildings and elsewhere into spaces for charter schools.
• Meanwhile, investment manager Bobby Turner has already successfully established one school-building investment firm and is building out a second one, in partnership with retired tennis star Andre Agassi.

Dive Insight:

The trend in charter construction investment is partially the result of the sector’s rapid growth, with schools proliferating quickly in several states. Last year, 500 new charter schools opened, bringing the total to more than 6,700 nationwide. At the same time, some states have begun to offer the schools access to some of the financial sources traditional public schools have. Other states, however, have either restricted those funds or are contemplating doing so.

The influx of private investors, the Wall Street Journal reports, offers a particular challenge, as those interests are often unrelated to the educational outcomes of the students. And the schools’ continued existence depends both on their financial health and academic performance. But failure of the schools due to academic concerns may not benefit investors, either.

“None of our schools have historically failed,” Turner told the Wall Street Journal. “We’re not interested in scaling mediocrity.”