A Model for Resiliency in the NYC Nonprofit Community

9/5/2023
Insights

First-time Borrower Purchases Class A Office Space for New Headquarters

From the start, remaining in Manhattan was important to our client. NYC is home to this internationally respected nonprofit. The organization has roots in the city that go back more than a century.

Our confidential client had outgrown its current leased space, which was both outdated and ill-equipped to support expanded programming. Remaining in New York presented some financial challenges. However, leaving the city during a time of economic upheaval and uncertainty (brought on by COVID-19) felt antithetical to its mission and standing among nonprofits.

The Many Advantages of Acquisition

Prior to the pandemic, our client had identified a condominium space just a few blocks from its current location. Purchasing the property was attractive on a number of levels, not the least of which was avoiding significant increases in occupancy costs upon renewal of the current leased space. The move also represented an opportunity to design their space to fit their exact requirements.

Owning property meant having an asset that would increase in value over time. Buying (vs. leasing) would have lasting positive impacts for the organization. And, right from the start, owning the space eliminated the uncertainty of a fluctuating rental market.

Property acquisition meant consolidating office and programming uses in a nearby Class A facility while gaining an asset for the balance sheet.

Formidable Challenges for Buying Property

The condo’s original investment was sizable, especially for a first-time borrower unfamiliar with the financing process. The property needed improvements, adding to upfront costs. Furthermore, our client had to consider the several million dollars needed to buy out their existing long-term lease, which was scheduled to expire in a few years. The organization would also have to absorb the temporary dual occupancy costs associated with simultaneously renting and renovating two locations.

At the outset of the COVID-19 pandemic, management put the project on hold.

Perseverance and Teamwork Pay Off

Approximately 15 months later, the condo owner approached our client with a significantly reduced asking price. In collaboration with a close-knit team of real estate brokers and consultants, ThinkForward helped the nonprofit weigh the advantages of taking on the project. Long-term benefits would far exceed projected rent increases under the current leasing arrangement. Ultimately, our client would realize substantial savings, with incremental increases each year, while building equity in the property.

“Purchasing property demonstrated long-term commitment to NYC. Not for just 3 years but for the next 30 years,” according to a Cushman & Wakefield real estate advisor.

Because of its tax-exempt status, our client could finance the project at low tax-exempt interest rates and avoid paying property taxes—costs that had previously been passed along through lease payments.

We structured the financing to achieve a number of key objectives.

  • 100% financing to cover all capital costs
  • Fixed debt service for the long-term, effectively reducing the interest rate risk
  • Additional line of credit secured to support growth
Ultimately, our client will save more than $30M in occupancy costs over the next 30 years.

Our Role in the Successful Acquisition

ThinkForward served as financial advisor. We worked hand-in-hand with the organization’s real estate team who helped the nonprofit with adept project management and real estate advice. Our client benefited from a network of professionals capable of tackling the many challenges associated with tax-exempt financing, including the various approval processes and requirements of the lender and bond issuer.

Project Details

Client/Project

  • Nonprofit
  • Property Acquisition & Renovation
  • Class A Office (70,000 SF)

Financing

  • Tax-exempt Bond

Collaborators

  • Build NYC Resource Corporation
  • Cushman & Wakefield
  • IDB Bank
You Have a Project.
You Have Questions.
You Have a Funding Need.
A 10-minute conversation can go a long way toward answering your questions. We may also be able to connect you to the right resources and people to help you.
Here’s how to connect…
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Thought Leadership

All
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Insights

A Model for Resiliency in the NYC Nonprofit Community

First-time Borrower Purchases Class A Office Space for New Headquarters

From the start, remaining in Manhattan was important to our client. NYC is home to this internationally respected nonprofit. The organization has roots in the city that go back more than a century.

Our confidential client had outgrown its current leased space, which was both outdated and ill-equipped to support expanded programming. Remaining in New York presented some financial challenges. However, leaving the city during a time of economic upheaval and uncertainty (brought on by COVID-19) felt antithetical to its mission and standing among nonprofits.

The Many Advantages of Acquisition

Prior to the pandemic, our client had identified a condominium space just a few blocks from its current location. Purchasing the property was attractive on a number of levels, not the least of which was avoiding significant increases in occupancy costs upon renewal of the current leased space. The move also represented an opportunity to design their space to fit their exact requirements.

Owning property meant having an asset that would increase in value over time. Buying (vs. leasing) would have lasting positive impacts for the organization. And, right from the start, owning the space eliminated the uncertainty of a fluctuating rental market.

Property acquisition meant consolidating office and programming uses in a nearby Class A facility while gaining an asset for the balance sheet.

Formidable Challenges for Buying Property

The condo’s original investment was sizable, especially for a first-time borrower unfamiliar with the financing process. The property needed improvements, adding to upfront costs. Furthermore, our client had to consider the several million dollars needed to buy out their existing long-term lease, which was scheduled to expire in a few years. The organization would also have to absorb the temporary dual occupancy costs associated with simultaneously renting and renovating two locations.

At the outset of the COVID-19 pandemic, management put the project on hold.

Perseverance and Teamwork Pay Off

Approximately 15 months later, the condo owner approached our client with a significantly reduced asking price. In collaboration with a close-knit team of real estate brokers and consultants, ThinkForward helped the nonprofit weigh the advantages of taking on the project. Long-term benefits would far exceed projected rent increases under the current leasing arrangement. Ultimately, our client would realize substantial savings, with incremental increases each year, while building equity in the property.

“Purchasing property demonstrated long-term commitment to NYC. Not for just 3 years but for the next 30 years,” according to a Cushman & Wakefield real estate advisor.

Because of its tax-exempt status, our client could finance the project at low tax-exempt interest rates and avoid paying property taxes—costs that had previously been passed along through lease payments.

We structured the financing to achieve a number of key objectives.

  • 100% financing to cover all capital costs
  • Fixed debt service for the long-term, effectively reducing the interest rate risk
  • Additional line of credit secured to support growth
Ultimately, our client will save more than $30M in occupancy costs over the next 30 years.

Our Role in the Successful Acquisition

ThinkForward served as financial advisor. We worked hand-in-hand with the organization’s real estate team who helped the nonprofit with adept project management and real estate advice. Our client benefited from a network of professionals capable of tackling the many challenges associated with tax-exempt financing, including the various approval processes and requirements of the lender and bond issuer.

Project Details

Client/Project

  • Nonprofit
  • Property Acquisition & Renovation
  • Class A Office (70,000 SF)

Financing

  • Tax-exempt Bond

Collaborators

  • Build NYC Resource Corporation
  • Cushman & Wakefield
  • IDB Bank
Back to articles
Client News
How a Mixed-use, Vacant Building Renovation in LIC Secured $3M in Financial Assistance from NYIDA

NYC agencies are encouraging investments in IndustrialBusiness Zones (IBZ).This is good news for real estate developers and building owners hoping to attract manufacturing and light industrial tenants through redevelopment of their properties. Financial assistance through the NYCIndustrial Development Agency (NYCIDA) can make a sizeable contribution to most capital stacks.

Insights
Tax Credits and Economic Incentives Explained

For many organizations, delaying a project means delaying future success. Tax credits and economic incentives can help fund the next step forward in any mission-driven organization’s growth and evolution. Considering the life line that these programs can represent, let’s take a few moments to understand what incentives are and how to tap into the potential for your company.

Case Studies
Consortium for Worker Education: 100% Acquisition and Construction Financing

The private, nonprofit agency Consortium for Worker Education (CWE) provides a wide array of workforce preparation, industry-specific training, and employment services for 70,000+ NYC workers every year. Union members, new Americans, and dislocated workers number among the populations served by this essential service provider.

Projects

Heading

Project phase

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

financing

Quick Look

This is some text inside of a div block.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

Challenge No. 1

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Challenge No. 2

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Solutions

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Game Plan

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Results

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Background

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Back to projects