Real estate fever is spreading to the city’s nonprofit sector, which is taking advantage of soaring values by cashing in on long-held assets across the five boroughs. The influx of cash is providing a welcome boost for the nonprofits; for developers, the sales are opening up desirable sites for residential development.

“Many institutions, by virtue of being either opportunistic (such as the Salvation Army, YMCA) or in financial trouble (St. Vincent’s, Brooklyn Hospital), see real estate as their salvation,” the chairman of Metropolitan Valuation Services, Martin Levine, told me via e-mail. “Where social service agencies and related facilities were located in neighborhoods that were once considered fringe locations, these locations are now hotbeds of development activity. Often their facilities are under built relative to current zoning or are functionally obsolete given a mission that changed over the years.”

In November, the release of a report by Governor Pataki’s Commission on Health Care Facilities in the 21st Century, which called for a number of hospital closures, set off a scramble by developers.

“Consolidation and changing health care delivery methods have also rendered a number of hospitals in the region obsolete and scheduled to close,” Mr. Levine said. “Particularly affected are smaller community-based hospitals in the boroughs, Westchester, and Union and Hudson County, New Jersey. Most of these are scheduled for conversion to housing. Other operating hospitals are seeking to parlay their valuable, underutilized real estate into cash to work their way out of bankruptcy.”

Newmark Knight Frank has been retained by the Mount Sinai Hospital and Mount Sinai School of Medicine to sell the 15-story, 120,042-square-foot pre-war apartment building at 1212 Fifth Ave., on the corner of Fifth Avenue and 102nd Street. It is also selling 315,000 square feet of adjacent transferable development rights to create a tower development site. The 76-unit apartment building at 1212 Fifth Ave. is primarily occupied by Mount Sinai entities.

As a result of this complex transaction, a developer would be able to build 32 stories of residential condominiums with views of Central Park on a site directly east of 1212 Fifth Ave., with frontage on East 102nd Street between Fifth and Madison avenues.

In July 2004, the medical center sold the 16-story, 120,000-squarefoot residential rental tower at 1200 Fifth Ave., designed by Emery Roth in 1928, for about $61 million. The property is being converted for sale as a residential condominium.

“With real estate values continuing to escalate, it is difficult for nonprofit organizations not to consider taking advantage of this wealth,” the chairman of Massey Knakal Realty Services, Robert Knakal, said. “Most of these organizations are driven by enhancing their platforms and their commitment to their causes. The money raised by converting real estate assets to cash helps significantly with this goal.”

Perhaps the real estate deal of the year for nonprofit organizations in 2006 was the complex transaction by New York Law School for its 12,500-square-foot site in TriBeCa. The school sold the lot, which served as the Bernard Mendik Library, and 306,000 square feet of air rights for about $445 a buildable square foot, or $135 million, to a joint venture of Dune Capital and Alexico Management.

This week, the investment banker representing New York Law School on that deal, Studley, announced that it has been retained by Cooper Union in the offering of a 99-year ground lease on the site at 51 Astor Place. This fullblock site is bounded by Astor Place, Third Avenue, Ninth Street, and Fourth Avenue, and has city approval for a mixed-use development totaling 270,877 square feet of mostly commercial office space (218,607 square feet), some retail space, and about 40,000 square feet for use by a college.

Another medical institution that is expected to fetch a high price for its real estate is Lenox Hill Hospital. It has retained an investment banker to sell a large portion of the campus of the Manhattan Eye, Ear and Throat Hospital and the building at 210 E. 64th St.

A number of churches have retained investment bankers to sell real estate. In the Bronx, Massey Knakal is representing Jehovah Witnesses in the sale of 960 E. 174th St. On the site is a Kingdom Hall religious facility, which will probably be demolished to make way for a residential apartment building.

A great deal of residential development is also taking place in Long Island City. The United Methodist City Society recently entered a contract to sell a development site at 39-36 21st St. for $6.1 million.

In Brooklyn, an investment banker has been retained to sell the Lemberg House at 8629 Bay Parkway, a site that is owned by a nonprofit organization operating a nursing home. The 16,000-square-foot building has additional air rights and is expected to sell for about $100 a developable foot, or $5.6 million, for use as a residential building.

The Byzantine Catholic Eparchy of Passaic has retained an investment banker to sell its landmarked development site at 143-149 Kent St. in the Greenpoint historic district, home of the Saint Elias Church. The asking price for this unique development site is $4.2 million.

Last month, a religious facility located at 171-173 MacDougal St. in Greenwich Village was sold to Property Markets Group. The seller was the Tenth Church of Christ, which occupied the converted manufacturing building. The new owners plan to convert the property into nine residential condominium units and a lower-level space that will operate as a Christian Science Reading Room.

Earlier this year, NYU sold two office buildings at 90 and 100 Trinity Place to real estate investor Joseph Chetrit. The properties were leased to the New York City Board of Education.

Similar to the final four in NCAA basketball, only four finalists are left in the interview process with the New-York Historical Society for the land and air rights for a lot located at 7–13 W. 76th St., adjacent to the society’s landmarked building. The winner is expected to be announced early this spring.

Earlier this year, Touro College, sold its seven-story elevator school building located at the northwest corner of Lexington Avenue and East 30th Street.

Not all nonprofits are selling. Last month, the American Cancer Society, purchased 75,950 square feet of condominium space in a mixed-use tower called the Epic, a joint venture of the Durst Organization, Sidney Fetner Associates & Associates, and the Franciscan Friars. The American Cancer Society paid about $44 million, or $577 a square foot, for nine floors in the 58-story tower.

“It’s not just in the sale of assets that nonprofits are looking for ways to better use their space,” a senior partner at Massey Knakal Realty Services, Timothy King, said. “To illustrate, Nazareth Regional High school, located at East 57th Street and Avenue D in Brooklyn, was built in the 1960s as a Diocese of Brooklyn facility, serving 1,600 students. The entire top floor was used as residence by the Xaverian Brothers, who taught at the school. Today, the school is run as an independent entity with approximately 600 students under the auspices of a Xaverian Brothers sponsored school. The top floor has been vacant and largely dormant for decades, and now the trustees are exploring alternative uses of this space including working with other nonprofit organizations that can put a special needs school in the space.”

Mr. Stoler, a contributing editor to The New York Sun, is a television broadcaster and senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.