Christmas is arriving early for nonprofit organizations that are seizing the opportunity of cashing in on the sale of real estate assets.
"With the extraordinary run up in values we've experienced over the past couple of years all non-profits and religious organizations are, by necessity, carefully examining their portfolios to cash in on unprecedented profit opportunities," the executive vice president and global head of valuation services at Cushman & Wakefield, Brian Corcoran, said."Downsizing, relocating to less expensive locations, the sale of air rights, and other strategies are all being considered by nonprofit directors and oversight boards to take advantage of the perfect storm to sell well-located New York real estate."
As reported in the Sun last month, the New York Genealogical and Biographical Society is planning to sell its headquarters building at 122 E. 58th St. for $24 million. The purchaser is New York Synagogue, an affiliate of the Hampton Synagogue. That's just part of the trend.
The First Baptist Church moved to 265 W. 79th St. on the northwest corner at Broadway, from Park Avenue, in 1891. The trustees are evaluating whether to remain at the site or explore the redevelopment of the site. This magnificent edifice can be demolished because it is not an official New York City landmark.
Seven blocks north of the church is the West Park Presbyterian Church on the northeast corner of 86th Street and Amsterdam Avenue. The church moved to its present location in 1890. It is in negotiations with Richman Housing Services for a redevelopment of the site that would preserve the main sanctuary and tower and erect a mid-block 21-story apartment building with 70 affordable rental and condominium apartments.
Perhaps the highest price ever recorded for the sale of developable land in the city may be realized by the New-York Historical Society for the land and air rights at an adjacent lot at 7-13 W. 76th St.
According to the trade, a developer might be able to build a residential tower with community facility space for the Historical Society. Trade reports indicate that 140,000 square feet of developable space might be available and could fetch a price of $800 to $900 a developable foot, providing the institution in excess of $120 million.
Touro College has been an owner of real estate on the West Side. The 40,000-square-foot, five-level facilIty for Lander College for Women of Touro College opened this fall at the base of the Hudson Condominium, located at 255 W. 60th St.
Last month Touro College purchased a one-story garage at 250 W. 61st St. On the site it can build a 75,000-squarefoot building. It paid approximately $18 million for the site. Touro plans to open a medical and pharmacy school on West 125th Street in Harlem. The Upper Manhattan Empowerment Zone has executed a $4.7 million deal to develop a college campus for Touro.
One major beneficiary of the increase in values in Harlem is the local churches. A new residential condominium is expected to be completed on the former site of the Gospel Temple Church of God in Christ at 2056 Fifth Ave., which is being converted to Riverbridge Court.
Now the adjacent Mount Moriah Baptist Church is currently looking for a joint venture partner to build a mixed-use development that would have a church and condominium tower, and utilize existing air rights. The Second Tabernacle Baptist Church decided to sell in order to minimize its operations and moved its operations to Brooklyn. The Association to Benefit Children recently sold its premises at 206 E. 124th St.
"Nonprofit institutions that own real estate are now taking advantage of the liquidity in the market by selling real estate and relocating to less expensive neighborhoods," a partner at Massey Knakal Realty Services, Shimon Shkury, said.
"Investors and developers, even those who were historically not sellers, have taken advantage of the market to sell their assets rather than refinance or allow cash flow to accumulate," the president of Adellco, Matthew Adell, said. "Nonprofits have followed suit, many feeling that the value of some longstanding locations are replaceable by other locations combined with consolidation of services and residences is a positive arbitrage that results in a stronger balance sheet."
In 2004, Beth Israel Medical Center sold the 14-story Beth Israel Hospital Singer Division building at 170 East End Ave. and two adjacent apartment buildings to Skyline Developers, an affiliate of Garden Homes Development. The price was about $700 a square foot, one of the highest on record for a residential project. Earlier this month, the Continuum Health Partners, parent of Beth Israel Medical Center, sold the 32-story, 166-unit residential rental apartment building in the heart of Gramercy Park on the west side of Third Avenue between 22nd and 23rd streets.
Also in Gramercy Park is the Parkside Evangeline Residence for Young Women, owned by the Salvation Army. The nonprofit has retained a sales broker to sell the 83,000-squarefoot building at 18 Gramercy Park South.
Industry leaders expect the property to fetch close to $100 million, where a new owner might renovate the tower or demolish to make way for a residential condominium. The Salvation Army purchased the former Parkside Hotel in October 1961 for $1.1 million and spent approximately $600,000 to renovate the 17-story building into housing for women.
New York Downtown Hospital sold its parking lot adjacent to the hospital in Lower Manhattan for $84 million. The hospital has retained an investment banker to sell the 12-story, mixeduse residential building at 318 E. 15th St. The 104,000-square-foot building, erected in 1965, is expected to fetch in excess of $500 a square foot.
St. Vincent's Medical Center last year closed three hospitals, including St. Mary's Hospital in central Brooklyn. The site has been sold to a developer who might build residential or a mixed use development. Early next year, St. Vincent's Midtown (formerly St. Claire's Hospital and Health Center) is expected to put up for sale some of its valuable real estate on West 51st Street.
Collegiate Asset Management Corp. has assembled and is marketing a development site on West 30th Street that will accommodate a 277,000-squarefoot hotel and timeshare development. It recently sold an office building at 45 John St. as well as a development site on West 67th Street.
Last month, the St. David's School sold a parcel of land it owned at 212-214 East 95th St. for $10.75 million. In Brooklyn, the Jehovah's Witnesses' Watchtower Bible & Tract Co. of New York sold a building at 89 Hicks St. to Brooklyn Law School. A few months ago it sold a 48-unit elevator apartment building for $14 million.
"Nonprofits are usually users for their space, so rarely have they been sellers," the director of Eastern Consolidated Properties, Alan Miller, said. "This unprecedented sellers market which we are in the midst of has accelerated some nonprofits plans and the pricing that they can achieve for their underutilized real estate has promoted them to dispose of their assets and find alternative locations which better serve them."
I have to concur with Mr. Miller when he said, "Many nonprofits are not aware of the incredible pricing achievable in today's marketplace. In some cases hidden value can be achieved that can be explained to them will behoove the non profit to sell and redeploy their funds in a more efficient manner."
Mr. Stoler, a contributing editor of the Sun, is a television broadcaster and senior principal at a real estate investment fund. He can be reached at [email protected]