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Real estate reverends: The new property brothers?

We don’t often think of popes and bishops as real estate barons, but indeed many religious leaders have to balance their spiritual activities with the more secular task of managing millions of dollars in property assets.

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Now many churches in the property brotherhood are cashing in their assets in the name of their holy missions, reports Bloomberg BusinessWeek.

There is plenty of money to be made. Religious organizations are some of the largest holders of real estate in the world, with cathedrals, mosques and seminaries spread throughout the globe. The Roman Catholic Church alone is one of the world’s most powerful financial institutions, not just on the wealth and generosity of its congregations, but from the financial gains made from its real estate holding in Vatican City and elsewhere.


These institutions are sitting on mega properties with immense value, and some experts say now is the time to sell and put that capital to better work in the communities they serve.

“We’ve seen a dramatic increase in interest in asset monetization of churches, parking lots, religious-hospitals, cemeteries and healthcare centers in the past 14 months,” said Alan Ursillo, Managing Director of JLL’s healthcare business. The Vatican itself even issued an RFP to sell a few of their Skilled Nursing Facilities earlier this year."

“In my opinion I can’t see any compelling reason for Churches to own property, when many investors are interested in purchasing these assets and leasing them back to the congregation long-term,” added Ursillo. “Selling their assets in a strong market like today, can deliver a great deal of financial freedom and possibility for these institutions.”

The strength of the New York real estate market is pushing several churches in Manhattan onto the market with multi-million price tags, reports Bloomberg Businessweek.

“Working to see lives and communities transformed is challenging, but so are the complex, financial decisions about the strategic use of real estate, be it here in the USA or abroad.”

Gary Reynolds, leadership team member at Elk Grove Village church

With opportunities to trade property for attractive returns, religious leaders are now adding real estate managers and developers to their list of responsibilities. And that’s a tall order for some.

“Working to see lives and communities transformed is challenging, but so are the complex, financial decisions about the strategic use of real estate, be it here in the USA or abroad,” said Gary Reynolds, who was a five-year leadership team member at Elk Grove Village church in Illinois, where facilities costs and their wise use were ongoing leadership concerns. He says all congregations, should take a fresh look at their location opportunities periodically, and reassess the reasons for their facilities as well as the roles those facilities are asked to play.

“There is immense value that is locked up for decades in brick, steel, and stone that can be unleashed and put to work for long-term ministry,” said Reynolds. “Facilities are important as but never really the main driver of the congregation. Knowledgeable, outside advice is invaluable for discovering creative alternatives to property ownership.”

JLL expects the sale of religious-owned real estate to increase in 2014, particularly for healthcare and assets that can be monetized in religious organizations’ portfolios in gateway cities like New York, San Francisco and Chicago.


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