Wednesday, March 20, 2013

Putting your assets to work

These are tough times for people who run not-for-profits, with needs increasing and government revenues declining. So it was heartening to read that at least one, New York Foundling, has found a way to put its real estate assets to work for it. According to news coverage like this, NY Foundling has made re-thought its use of the 14-story office building it built on Sixth Avenue in the early 1990s. Five years ago it sold off six floors to the School Construction Authority for an elementary school. Now it is contracting its operations into five of the remaining eight floors and will rent out the top three.

Creative use of real estate brings lots of options. For example, the New York Times reports that the Foundling is planning to offer staggered leases that will give it the option of reclaiming some of the space if it grows again. It's been able to use money from the sale of the lower floors to renovate the space it retains. And the hope is that the income from the rents will help alleviate some of the pressure to raise funds. Of course, operating as a landlord will bring its own challenges.

Other foster care agencies own valuable property in New York City and the surrounding counties. It will be interesting to see whether, and how, any of them change the way they make use of those properties.

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