WITH New York City becoming the education capital of the world, classes are spilling over from formal school settings to retail locations, and the creatives are cooking up school settings faster than a sidewalk chef can mustard a hot dog.

From pre-schools to Kabbalah classes, the thirst for education has real estate execs spinning their own creative juices to find just the right spaces to house their clients.

And what they are finding is that storefronts provide easy entry as well as locations for services from course sign-ups and bookstores to tot spot drop offs.

“They take a very small amount of space on the ground and then add a second or basement space to blend the rental rate,” said Laura Pomerantz of PBS Realty Advisors.

“That’s one of the ways it works well economically because schools are very price sensitive.”

The biggest problem for urban areas is the land acquisition, said architect Geoff Doban, a partner in Gruzen Samton who is developing a compact prototype early childhood school for New York City’s School Construction Authority.

Available land is often too small, too contaminated or has substandard soil, so that drives a lot of the decisions, Doban said.

In Manhattan, land is so costly, schools are seeking places in already constructed buildings that can also provide them with a separate entrance.

Many schools are “kicking the tires” all over Downtown because of the residential influx, said Corey Zelnik, president of Win-nick Realty Group who reps a lot of storefronts.

For a new Downtown high school, however, the SCA leased at the large office building at 75 Broad Street through their rep, Richard Kennedy of Cushman & Wakefield.

The owners created a building within a building of 100,000 feet.

“The Millennium School has a separate lobby, its own elevator and its own infrastructure was created,” said Howard Kessler of New-mark who represented the building owners.

Cory Zelnik of Winnick says he’s recently been getting serious inquires for his uptown retail spaces from a variety of schools including universities and day care centers.

“The university wants some street presence for an admissions and enrollment area,” Zelnik.

The nursery school, however, is seeking a side street location on the Upper East Side at a two-story building that they can entirely take over.

Play areas on multi-levels can be set up in such high-ceiling retail spaces and sometimes owners will allow these tenants to use the rooftop.

“They are fenced in and have all the padding for precautions,” added Zelnik.

But architect Doban warned that rooftops can become problems.

“There is a lot of maintenance long-term and if you are going to do it right you have to put a lot of money into it so it won’t leak,” Doban added.

Rob Frischman of JDF Realty represents Preschool of America, a poster child for expanding into creative spaces, many of them initially expansions from street retail spots.

PoA has leased its 15th location at 1190 Park Avenue at 93rd Street. The 4.5-story, 27,500 foot building is owned by the Russian Orthodox Church, which was represented by Ira Z. Fishman, Corey Abdo and Dana Fishman of Winoker Realty.

Another PoA deal at the Friedman’s rental, Ivy Tower at 345 W. 42nd Street, is geared towards possible theatre industry occupants who might need to appear on Broadway while leaving their own kids in safe hands.

Here Frischman said PoA will also feature flexible babysitting for tourists and theater goers, including providing some late-night babysitting.