Unlikely Expertise: Flipping, Holding, Building a Church
There's a niche group for just about everything in brokerage—even churches. (That'll keep you honest.) But the experts at church realty solutions, a specialty group within Lee & Associates, tell us their practice involves more than just one church selling a property to another.
On Tuesday, we spoke with the CRS team: principals Tom Morgan and Thomas Smith, brokers with more than 30 years of experience, flanking senior associate Gary Friesen (an ordained minister who spent nearly 30 years running a ministry for inner-city families in San Diego and LA). One of their deals, currently in escrow, is the sale of nearly six acres in Redlands to a residential developer who plans to subdivide the land and build housing. Thomas notes that, based on location, some church properties are more valuable today as multifamily or mixed-use sites. "Our client base is not just churches in terms of the buy or sale side," he says. There's lots of ways to do commercial real estate deals through a church practice. (Just make sure you're giving them a fair deal because someone else might be reading over those leases.)
CRS sold the historic Wilshire Christian Church in LA for $9M. Many recent sales have involved traditional church buildings with parking in existing neighborhoods. But in the last 15 years or so, there's been a migration from neighborhoods into more regional locations. CRS is working on deals now for churches that have grown large enough to lease in industrial parks, converting concrete tilt-ups with high clear heights to create a sanctuary and classrooms. In some cases, the facilities are going into the second-generation—CRS sold two industrial condos in Escondido from one church to another. They're also transforming vacant big boxes or bank buildings in shopping centers that they believe can fit a church's demographics.
CRS estimates it has closed 40% of the church transactions in San Diego County since 2010, including schools, daycare centers, event halls, and other church-related properties. They see their practice as part ministry and part business enterprise. Beyond transactions, the team says they're trying to use an asset-management model to help churches create value from their real estate via additional revenue sources such as an ex-minister's catering business--a real-life example--or prepare it for the next use. Another deal they're working on: the sale of an existing church in LA that will be redeveloped into Class-A apartments (haven't you always wanted a stained-glass window in your bedroom?). They predict the project will see significant rents because it's well-located with freeway access.
