The outlook is good even for nonprofit buyers. That’s because “cultural spaces are considered a sexy partner to have,” according to Wolf, a principal at the firm. Developers might look to nonprofit partners because of the cachet their programs bring, and because most nonprofits don’t need the foot traffic that retail spaces do and can thus be more flexible in terms of location. “Nonprofits are good partners in larger developer projects,” said Powers. “There’s interest in having a community partner.”
Such was the case for Gary Greenberg, executive director and CEO of the Boys and Girls Clubs of Hudson County in Jersey City, N.J. Greenberg’s organization, housed in a retrofitted coal bunker since 1984, will move to a new facility about 200 yards away at no cost. Ironstate Development and Kushner Real Estate Group (KRE), developers of the new building known as 18 Park, approached Greenberg to ask if he would consider selling a portion of current property. Talks soon moved to selling the entire lot, and the developers suggested the Boys and Girls Clubs move into 18 Park, which is slated for completion next year.
Having a nonprofit on the ground floor is “helping to get notoriety and in general, the community, the city and lenders feel great about it,” said David Barry, president of the Hoboken, N.J.-based Ironstate Development. “Overall it’s a great thing and people feel good about it. Whether it has a direct impact on dollars per square foot on the apartments, I can’t really say.”
The deal consists of selling the Boys and Girls Clubs’ current land and moving into the new space, and the Club will get to keep the difference between the sale price and the cost of the new space. The net gain for the Boys and Girls Clubs could reach up to $5 million, said Greenberg and Barry.
The sale of the old building closed in early May, and Barry said it sold for “roughly $12.5 million.” He added, “The city allowed us to zone (the old site) for additional development, and that allowed us to pay more than just the cost of relocating the Boys and Girls Clubs.”
Most of 18 Park will be luxury rentals, but Greenberg will have about 35,000 square feet on the ground floor, which is roughly the size of his current space. The new construction means fewer upkeep and repair costs. “There isn’t a day that’s gone by in the last 20 years we haven’t been fixing or repairing something. It’s a fortune to run and maintain,” said Greenberg about the current space. Once the club moves, he said, “Rather than spend funds on occupancy, we’re able to use those funds for the kids and the programs. It saves a tremendous amount.”
The club’s presence in the building is also beneficial to tenants, said Greenberg. He’s going to keep the facility open after hours so 18 Park residents can use the gym. “Imagine you’re a young guy, still playing a little ball, you know after the kids are gone you can go down and use the facility,” said Greenberg. The clubs’s space is “a community center for the building, as well.”