So I was reading a list of available Dupont Circle commercial properties. (You have your hobbies; I have mine.) One address looked very familiar.
Why is the American Humanist Association (really their foundation) selling their building (or at least trying)? They do own, rather than rent. Does anyone have details? A quick search didn’t bring up anything.
I am going to speculate. But there has been a recent phenomenon of small organizations selling their real estate to augment their flagging endowments. I know a Swedenborgian Church which is doing this, and Meadville/Lombard is attempting to do this.
I think over the long term the strategy is penny wise and pound foolish. It takes property owned outright, and gives the organization a long term rental burden. Renting offers flexibility, but leaves you very vulnerable to upswings in rental prices (especially if you have a commitment to staying in the same community).
If the size of the real estate is the issue, then a better option is to downsize to a smaller real estate holding. Profits from the sale of the larger property can be banked as contingency fund for property maintenance.
Derek wrote:
-snip-
I am going to speculate. But there has been a recent phenomenon of small organizations selling their real estate to augment their flagging endowments. I know a Swedenborgian Church which is doing this, and Meadville/Lombard is attempting to do this.
I think over the long term the strategy is penny wise and pound foolish. It takes property owned outright, and gives the organization a long term rental burden. Renting offers flexibility, but leaves you very vulnerable to upswings in rental prices (especially if you have a commitment to staying in the same community).
Derek,
It might make sense if they are relocating to a real estate market that is cheaper than downtown Washington DC.
Now if they’re staying in DC but moving from owning to renting, then this decision doesn’t make sense.
Remember M/L’s boiler giving out last winter? There’s a cost to owning too, and it can really be a cost when it’s an old building.
Bill – Very true! There is a cost to owning, especially when repairs have been deferred, or when the property is too large for the economic scale of the organization.