Is your church looking to move?

May 22, 2012

The church real estate market is constantly changing. While some churches are going to multisite campuses and moving into strip malls, others are moving out to the suburbs and looking for more land. So if you’re thinking of moving and need to find somewhere to meet, or sell your current building, where do you start? I had a conversation with Matt Robertson of Keller and Williams that hopefully will shed some light on the process.

In what situations could a broker be of help to a church?

There are a number of situations that a broker could be of help to a church.  They could include any of the following:

Growing church needs office space for their staff.

A growing church looking to relocate into a building or onto new land. (May be in a church building now or currently be meeting in a temporary facility such as a school, theater, YMCA, etc.)

Growing church that needs multi-site location(s).

Plateauing church that needs to address their facility pain points and explore solutions.

Declining church that needs to sell their property.

Why should a church use a commercial broker instead of a residential agent?

Churches are considered commercial property.  As a result, the process of buying or selling the commercial property can often be a complex process.  In regards to an acquisition, for example, relying on the expertise of a commercial broker could entail a number of things such as a ministry space needs analysis, financial feasibility and funding procurement coordination.  Knowing what your long term needs are in relation to your financial capability today is important.

There needs to be a clear understanding of what your needs are and why?  Otherwise, your church’s speed to ministry at a new site could be impacted significantly.  I encourage church’s to seek out the right amount of property or buildings so as to not potentially over burden the church with unnecessary debt.  If the church’s needs show that they can fulfill their ministry strategy with 20 acres of land, then purchasing 60 acres could hurt the church both short and long term.  Paying for 40 acres that you may never develop could lengthen the timeline for your church to get started building on the new campus as well as lessen the amount of facilities that can be built on your new site in the initial phase.  The excess land could potentially be sold and developed, yet the market for raw land is limited in today’s market.

Further, a commercial broker understands that a team of people may need to be assembled to acquire a property which could include working with architects, civil engineers, traffic engineers, geotechnical engineers, a real estate attorney, and the like.  This is especially true in the case of a rezoning.  Working alongside various professionals through the due diligence period, further negotiations following the due diligence, and getting the deal to close are all critical to putting the puzzle together.

Further, commercial brokers are able to gain significant exposure for their clients to the commercial market.  Typically, they are members of their local Commercial Board of Realtors and have resources available to them such as the online commercial property listing, search, and research tool called Site Index.  Other commercial property sites that commercial brokers utilize include Loopnet, CoStar, etc.  Typically, residential agents are members of the MLS.  The MLS, or Multiple Listing Service allows agents to include residential and commercial properties, yet the total number of commercial properties listed are usually much less than the commercial sites.  For example, there are currently 1,000 commercial properties listed in the Greater Charlotte area on MLS compared to 6,000 on Site Index.

What types of properties are you seeing churches looking for right now?

In the last couple of years, there has been a shift to purchasing an existing building.  These are sometimes existing churches, but more often they are warehouse or big-box types of buildings.  The church is then converting the building for use as a church.  This can be a much more economical approach with many buildings sitting vacant due to corporate cut backs, bankruptcy, etc.  Athens Church recently acquired an old Wal-Mart with 110,000+/- square feet and 700 parking spaces for $1.6 million.  See Commercial Real Estate Opportunities for the Church in 2012 and Beyond for more info.

If a church finds a piece of land that they like, what are some of the issues that they should be aware of before looking to buy it?

One of the most important factors whether raw land or developed with a building is the zoning.  I have heard a number of agents comment to me that a church can go anywhere.  However, this is not the case.  Every jurisdiction is different in regards to how they term and define a particular zoning classification and what is “allowed by right” within a certain zoning classification.  Other big factors are utilities, topography, adjacent owners, future land use plans (ie light rail lines/stations), etc.  And from a ministry perspective, ensuring that the location is in an area or region that your church feels called by God to reach.  See Three Things to Know When Searching for Land to Build a Church .

Are churches successful in selling their buildings in this economy?

Churches have historically been one of the more difficult properties to sell due to the single use nature of this type of facility.  But, yes, churches are selling in this economy.  However, the timeline to a successful sale is tied to a number of factors.  These factors include: acreage, square footage, age, condition, type of building, and the big one, location.  If all of these factors are appropriately taken into account when pricing the property, it will sell.  The challenge is that often churches think their property is worth more than it truly is.  This reiterates the need to secure a commercial broker that understands ministry and the church market.

A big thanks to Matt for the information. To get in touch with Matt call 704-507-4656.

As always, if I can be of help as you seek to cultivate Christ-like generosity, please let me know!

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