Sunshine's 2010 Nonprofit Real Estate Survey found that slightly more than 40% of respondents have had to downsize staff, make wage cuts or both. As a result, "Many nonprofits face the possibility of shedding space, but that is not necessarily their only or best solution," Sunshine says. "While the entire sector has tricky choices to make, each individual nonprofit faces its own unique challenges."
She suggests that nonprofits that may need to rethink their real estate strategies consider options such as reconfiguring or subleasing some of their existing space. However, relocation may be the best bet in some situations, and among those who say their space needs will go up or down next year, 48% are considering a move, including 15.5% who said they'd consider buying their space.
Finding a new location is not an option nonprofits consider casually, according to the survey. Sixty-six percent of respondents said that their nonprofits have been at their current location for at least six years, 48% have been there for more than 10 years and 28% for 20 years or more.
In fact, most respondents say they have no plans to relocate, especially as 75% of them also say they're "somewhat" or "very" satisfied with their landlords, and 87% believe their current spaces provide reasonable value to their organizations. If they were to make a move, however, 97.4% would choose to stay in the city, with only a few respondents considering a move to the suburbs or exiting the region altogether.
One-third of survey respondents cited rising operational costs as their most important real estate challenge. Twenty percent said their rents are too high, 9.3% cited inefficient space, 3.1% said the location was inconvenient, 2.3% said the building can't meet the organization's tech needs and 31% cited other challenges.
"Yet in today's challenging market, nonprofits should realize landlords are also looking for creative solutions," Sunshine says in the release. "Landlords always want to recruit and retain tenants, and most of them stand ready to work with nonprofits to try to accommodate their needs."
On the positive side, the survey indicated that some nonprofits are maintaining or even gaining ground. Thirty-six percent of respondents said their nonprofits were able to maintain staffing levels and wages over the past year, and 12% actually increased staff over the previous year. Twenty-six percent say they're optimistic about their '10 donor funding.
That being said, 78% said donor funding has "moderately" or "significantly" slowed during 2009, while 65% said the outlook for funding next year is "uncertain" or "pessimistic."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
