Real Estate Strategy Can Further Nonprofit Missions

Transwestern's Nonprofit Advisory Group Shares Insights in "Ask the Expert" Publication

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Jan 20, 2015, 01:00 ET

HOUSTON, Jan. 20, 2015 /PRNewswire/ -- Balancing financials and business with an altruistic vision presents nonprofits with a unique challenge, according to Transwestern's first-quarter "Ask the Expert," featuring members of the commercial real estate firm's Nonprofit Advisory Group, Senior Vice President Larry Serota, Partner Lindsay Ornstein and Principal Michael Griffin. Before a nonprofit makes a real estate decision, several key elements need to be addressed.

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FINANCIALS

It's important to take into account factors such as existing expenses, income streams such as grant funding or private donations, financial reserves and aversion to risk. Additionally, some tax advantages could result from owning space as a 501(c)(3) rather than leasing it.

LOCATION

When it comes to the location of the space, background on the nonprofit organization may be especially important if it has a long history serving a particular market or constituent base. Like any business, easy access for employees, board members and clients is beneficial along with close proximity to public transportation. Selecting a location that is consistent with the organization's brand also sends a very important message to constituents.

OPERATIONS

Many operational objections can be accomplished or furthered through a strategic real estate project, including tactical issues such as build security, IT requirements, records storage, work station layout and other architectural concerns. Philosophical goals to consider would be how much attention to devote to sustainability efforts, tailoring lease terms to meet the unique requirements of the organization and finding a potential landlord and vendors that share a belief in the organization's cause.

BRANDING

A nonprofit's space sends a clear message of the organization's brand and mission, so it's vitally important that the two align. The physical attributes should reflect the culture and interests of the staff as well as the mission of the organization, such as incorporating team rooms and collaboration areas for team-oriented organizations. Additionally, the space must be high-quality enough so that donors will believe the institution is financially secure, but not so upscale that benefactors think the nonprofit is squandering money.

RECRUITMENT

Nonprofits seek to attract a younger, quality workforce just like many of today's businesses, but it can be tough for a nonprofit to keep pace with modern sustainable technology. The best way to combat this is good upfront planning when looking at the physical space. For example, buildings with large window provide plenty of natural light to reduce energy consumption, and operable windows allow for fresh air circulation.

CREATIVITY

The "nonprofit" category includes organizations from professional development to food pantries to historical societies, and each different organization has its own unique needs when it comes to real estate. For example, religious organizations have a tendency to spread themselves too thin – physically and metaphorically – because there is such a great need for their services. Fostering a creative, disciplined approach can help unite mission and real estate decisions to drive value for each organization.

"Ask the Expert" is a Q&A with Transwestern experts and leaders. Download the full version at twurls.com/ate-nonprofit.

ABOUT TRANSWESTERN
Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 180 offices in 38 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate. For more information, please visit transwestern.com and follow us on Twitter: @Transwestern.

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Stefanie Lewis

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SOURCE Transwestern