Making Real Estate Work for Non-Profits
by Richard Gentilucci
Nonprofit World Magazine   FULL ARTICLE

"Individuals and corporations have built empires by owning and managing real estate. One of the biggest misconceptions is that land development is not compatible with the operation of a non-profit organization. While opportunities exist for non-profits to capitalize on real estate ownership, few take foll advantage. Rather than owning land and buildings for long-term benefit, most non-profits seek short-term gains. As a result, they don't enjoy the full value of real estate, which can be in the form of appreciation or future income streams..."

"There is no question that spiraling construction costs have impacted the economics of real estate development in Southern California and across the nation. The problem has been driven, in most part, by increasing material costs. For example, although it has shown some signs of stabilizing, the cost of steel, which includes everything from beams to brackets, has increased more than 50% over the past three years..."

"Success among double-bottom-line funds is encouraging investment in underserved communities, where the spending power may exceed that in suburban markets.

"Through the creation of regional "double bottom line" funds, a significant amount of real estate investment capital is finally finding its way into impoverished communities throughout the United States. Over the years, there has been a disinvestment, or lack of capital flow, into low-income areas due to the widely held belief that community investment and generation of appropriate risk-adjusted returns are mutually exclusive..."

"A 200-acre parcel of industrial land in Riverside, California, known as Agua Mansa was the kind of project that would make most investors turn and flee. Unable to maintain the debt service on high-interest rate bonds, the original developer had gone bankrupt. Worse, perhaps, was a site straddling the San Bernardino and Riverside county line, leaving the developer to satisfy entitlement requirements of two different jurisdictions, and despite an existing settlement with environmental regulators, prospective buyers were skeptical about their ability to build on land declared as habitat for an endangered species..."

Seeking Divine Intervention
California Real Estate Journal   FULL ARTICLE

"The First United Methodist Church wants to build 200,000 square foot mixed-use project with a development partner. Since they don't have the $60 million to develop it on their own, the church hired BTG to help the church find a joint venture partner with them to develop the property..."

"While selling real estate can be an economic boon for churches, some don't take into account expansion needs down the line. If a church doesn't have someone guiding them, their property is often undervalued and they don't profit to their fullest potential..."

"FUMC has retained BTG to facilitate the development of a $60 million, 200,000 square foot mixed-use project in downtown Los Angeles that will serve as the next home for its congregation. BTG will advise and represent the church though its RFP and RFQ process and selection of a joint venture development partner..."

"We are seeking partnership with developers who understand the Church's mission and will work closely with them for mutual benefit."
    - BTG's CEO, Richard Gentilucci

"For  the FUMC of Los Angeles, the oldest congregation in Downtown, the last four years have been spent in exodus. FUMC came to realize that the only realistic strategy - given the South Park boom and the financing woes - is to find a developer both sympathetic to their non-profit needs and interested in what has become prime real estate. By enlisting BTG, the project looks to become more feasible and provide better use of property..."