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Thursday, Mar 28, 2024

Real Estate Transactions for Non-Profits Can Be Daunting

The New Testament says God told Peter that he would build his church upon him. The paperwork involved has intensified somewhat since then. Ask Bill Lowder he represents churches and non-profits in selling and leasing as a Realtor with NAI Capital Non-Profit, covering an area from San Diego to Santa Barbara. The sale of a church building is not like other commercial transactions. For other Realtors, “if they go into it with blinders on, they’re going to get surprised,” Lowder said. “It takes a lot of time, and a lot of brokers can’t take the time,” he said. “Although we have to follow the same legal guidelines and regulations as any commercial property for office or industrial use, non-profits also have to have IRS approval. They have to have their 501(c)(3) documentation. The government requires many reports and more data necessary for the sale to be able to go through,” he said. “There are so many requirements,” said, citing fire department and building and safety issues. Many places of religion were built before the Americans with Disability Act requirements and also do not meet contemporary parking restrictions. In a typical commercial building of an equivalent size, fire and parking regulations address the number of users who might be in the facility at any one time. Whereas for a church, typically the total number of users in a week could all be there at the same time, which, as Lowder said, impacts neighborhoods. Lowder cited other issues for non-profits in-cluding rehab centers and homes for unwed mothers is they often get funding from grants. Likewise, he said, “It’s time consuming. They should use a professional grant writer, but often they try to engage it by themselves.” The complex nature of applications and documentation mean “they can get bogged down,” said Lowder. That can also push back the timeline for closing. It’s not unusual for escrows to take six months to a year to close, he said, which can be another disincentive for other brokers. They get referrals from other brokers who don’t want to handle the business. “We of course pay a referral fee, so they’re glad to do it,” Lowder said. Lowder’s business run with his wife, Dawn, out of the global firm’s Ontario office can coordinate all the paperwork for any of their transactions through the main office in Encino, sometimes completing transaction on facilities they haven’t seen. Hillcrest Christian School in Granada Hills retained the Lowders as agents to sell some surplus property, said Rick Donnelly, director of development. He said, “My good friend Bill” brought another expert from NAI and a couple of potential buyers “some pretty big players” and “worked with us from both sides” on finding a relocation site. Although letters of intent were offered, not everything aligned properly and the property is not currently for sale. The Lowders are in so specialized a niche that they cover an area of up to 20 million people, whereas a typical Realtor may not focus beyond an entire zip code. The regional coverage permits the non-profit niche to be somewhat isolated from the peaks and valleys of the generalized, local real estate market, he said. “It’s less affected than residential or what may happen with office and retail markets, but it’s still supply and demand,” Lowder said. Recently the business has evolved into working both with developers and with a church, introducing them to each other and getting the developer to spin off 3-5 acres for religious use. 12-Asset Listing The $92.5 million Whitewater Auto Care Center listing is being handled by Marcus & Millichap Real Estate Investment Services in Encino. The 12-asset portfolio, including nine properties in Bakersfield, two in Ventura and one in San Fernando, is represented by Lior Regenstreif, senior vice president in the firm’s Encino office and Glen Kunofsky, senior associate in Manhattan. Each Whitewater Auto Care Center offers a combination of services: a full-service car wash facility, convenience store, gas station, restaurant and quick lube services. The properties can be purchased individually or as a customized portfolio of three or more properties. The portfolio includes an 8,900-square-foot San Fernando Road location in San Fernando, an auto service center that includes a car wash, restaurant, convenience store, gas station and oil change service. The Johnson Drive site in Ventura is a 6,298-square-foot 76 Gas Station/convenience store is right off the 101-Freeway and the 8,104-square-foot Market Street locale in Ventura is branded by Chevron and is adjacent to Target, Mervyn’s and Kohl’s. Actions at Lee & Associates Peet’s Coffee & Tea located at Edgemar, a Frank Gehry-designed office building on Main St. in Santa Monica, has renewed its lease for 10 years in a deal transacted by Trevor Belden, a principal at Lee & Associates-LA North/Ventura, Inc., based in Sherman Oaks, transacted a 10-year renewal lease with in Santa Monica. Total consideration was approximately $1.1 million. Belden represented the landlord, Sequoia Shores LLC, and Peet’s was represented in-house. In another transaction, Belden, Robert Erickson and Scott Romick, principals at Lee & Associates, represented the advertising company Studio City and Bershin Properties in a 10,169-square-foot office lease on Laurel Canyon Blvd. in North Hollywood. Total consideration for the five-year lease is $1.7 million. Romick represented the tenant, Studio City, a firm that creates promotional advertising for TV shows. Belden and Erickson, represented the landlord. Willow Court LLC of Malibu has acquired a 23,400-square-foot retail building in Aurora, Colo. for $4,350,000. Mike Smith, an associate with Lee & Associates, with Lee principal Craig Stevens, represented the buyer. The free-standing building sits on about one acre of land and the tenant is Beauty Supply Warehouse, which ranked No. 58 on Inc. magazine’s list of fastest-growing private retail companies in 2007. The seller was represented by Commercial Niche Realty of Denver. Texas Via Encino Joe’s Crab Shack, a 6,265-square-foot seafood restaurant chain based in Lewisville, Texas, sold for $2,000,000 through the efforts of Benjamin Flinders at Investment Real Estate Associates in Encino representing the buyer, a private Trust and Jaqueline Barrett of Marcus & Millichap in Encino, representing the seller, Sovereign JCS II, LLC. IREA also conducted the sale of a multi-tenant, 7-Eleven-anchored property in Chatsworth for $2,700,000. The 7,586-square-foot building was built in 1984 and is at the northeast corner of Devonshire Street and Topanga Canyon. Chris Thompson, senior vice president at IREA represented the seller, Devonshire Topanga, LLC. Ed Hakopian of Basco Investment Group represented the buyer, a private individual. MPAA Moves into Galleria The Motion Picture Association of America, Inc. is relocating to 15301 Ventura Bvd. at the Sherman Oaks Galleria, announced real estate advisor Studley. Mark Robinson and Craig Jablin, both corporate managing directors at Studley’s West Los Angeles office, represented the MPAA in the 8.5 year-sublease with Warner Bros. Entertainment Inc., whose animation group had formerly occupied the space. MPAA’s Los Angeles office will occupy the 104,634 square feet with the Alliance of Motion Picture and Television Producers, Directors Guild of America Contract Administration, and the Directors Guild Producer Training Plan, on the first and second floors. MPAA had occupied previous space nearby on Ventura Boulevard in Encino for 15 years. And Then There Was Lighting Paskal Lighting, a national lighting and grip company for the entertainment industry, signed a 10-year lease to occupy a 97,467 square foot building on Van Nuys Boulevard in Pacoima. Its 22′ ceiling clearance and 17-dock high-loading positions make it one of the larger and more functional distribution properties in the San Fernando Valley. Bob Scullin, Chad Gahr and David Young of NAI Capital’s Encino office exclusively represented the lessor, Pacoima Partnership Phase II, in the long-term lease of the building to Paskal. The transaction is valued at over $7.8 million. Paskal Lighting was represented by Greg Barsamian of Coldwell Banker Commercial North County.

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