LOS ANGELES-A Wilshire Blvd. church campus has been sold for close to $28 million, which a broker specializing in religious properties claims may be the largest church transaction this year.

CNL Religious and Educational Real Estate Corp. of Orlando, FL. represented the owner of the church, located at 1925 Wilshire Blvd. near MacArthur Park. Universal Church was the buyer; Evangelical Christian Credit Union was the seller. The building is described as partially completed in real estate documents. 

The property includes a 42,558-square-foot administration building that was originally constructed in 1962 and renovated in 2001, and a 54,839-square-foot worship complex, which features a sanctuary that accommodates more than 1,500 people, gym, dining hall, kitchen, several classrooms and offices. It also has a two-level underground parking structure.

CNL Religious and Educational Real Estate Corp. currently has 160 listings in 30 states valued at $225 million, and its principals have assisted in the sale of over 1,500 religious and educational facilities nationwide. The company does other transactions in other sectors as well, including office, retail, industrial and multifamily. Chris Bury, VP with CNL Religious and Educational Real Estate, brokered the Wilshire transaction. 

Matthew Messier, the company principal, tells GlobeSt.com that the firm's focus on the religious real estate business started when his father's church merged with another. “He was the only guy with a broker's license,” recalls Messier.

Realizing the opportunity, the family began to focus on this particular sector of commercial real estate. “It's a lot different than selling an office or warehouse,” Messier says. “One of the main things is there's a ton of emotion tied to a church building. People theologically know that a church is the people. But they look at the brick and mortar as tied to events they had during their life – marriages, funerals, first communions. When you're selling a church building, there's the real estate side, and there needs to be a lot of empathy and understanding of the process.”

Messier's firm sells any kind of religious building, and has helped move temples, mosques and other houses of worship. Considerations for buyers of the real estate “depend on who the buyer is. Most are looking at it just like anything else, based on functionality. Seating capacity is a huge factor, parking is super important, accessibility is important. Some groups don't want too many classrooms. The rough rule of thumb is you get 40 square feet to 60 square feet person.”

More-restrictive zoning laws have made it more difficult to build or transform a house of worship into something else, a change from the days when many houses of worship were built in residential areas and could be built almost anywhere without major hassles. Now, the available properties have to compete “with retailers who have deeper pockets,” Messier says, making it harder for religious institutions in search of new homes.

The Wilshire property had interest from "a variety of users," says Bury, listing other church groups, a large non-profit, schools, an auto dealership and various other users outside the religious community. "Because of the difficulty and lengthy process of developing 'new' religious facilities, there is high demand for church space in the L.A. metropolitan area."

Financing for a house of worship, like with any other property, “is not as easy as it was five years ago,” Messier says. “Churches are treated very much like a commercial loan. They will require 20% to 25% down, they have to have cash flow like everyone else, they have to have their financials in order, especially for the smaller churches, which don't have a CPA doing audits.” There are banks and credit unions that specialize in houses of worship, Messier says. “If they have the down payment and cash flow, they can definitely get a loan.”

But on the flip side of that, as with many public institutions, some houses of worship have financially struggled as the economy contracted. Messier says he's seen an increasing number of properties in his purview affected. “Churches live on donations. When people are out of jobs, churches collect less money. They did like others did when times were good: 'Let's get a bigger building.' When the giving went down, they were in the same situation a lot of our friends were in.” But Messier also notes that, just like in residential and multifamily housing, the positive side is the massive appreciation that can occur when the economy turns around.

His most memorable transaction? As he was finalizing the closing documents for a piece of land in Orlando, the buying pastor told him that the Lord had told him years ago to build a church on the piece of property he was now buying. The pastor claimed he had buried a Bible on the property after hearing the message, and informed Messier that, after the closing, he was going to retrieve a shovel and reclaim his Bible.

Messier says that being in the business of selling houses of worship means you meet a lot of nice people. “I used to do industrial and not too many of your big box warehouse owners say, 'Can I pray with you?' ”

As previously reported by GlobeSt.com, the 464-unit complex known as the Vermont is recently started construction on its top floors, putting it on track to open next year. The complex is near the 1925 Wilshire Blvd. church.