Churches Cash In on Mixed-Use Development Frenzy
As some churches struggle (and others don't), a new urban church trend is rising: churches teaming up with developers to create mixed-use space that generates cash, and is still a place of worship.
Just two weeks ago, The Collegiate Churches of New York did a $40M JV with HFZ Capital Group to turn land adjacent to its Marble Collegiate Church in Manhattan into a mixed-use building featuring 64 stories of program and retail space and condos. Proceeds go straight to church programs and restoration.
“Many other developers had tried for years to do a deal with the church,” HFZ founder Ziel Feldman says. Ziel, of course, was a keynote speaker at our Residence of the Future event this summer. “We came in with a great land cost and find the site to be fantastic. The church itself is easy to work with, and the physical structure is a beautiful cornerstone for building.”
This deal is another in the trend of struggling churches teaming up with real estate companies to earn extra revenue (while also building brand-spanking-new amenities) instead of selling or foreclosing. "They get cash, and they get a better facility," Collegiate EVP Casey Kemper says.
According to CoStar, 1,502 religious-affiliated properties sold last year, a big jump from 889 in 2010. Dollar volume increased as well, swelling from from $578.9M in 2010 to $1.3B. [WSJ]
