Nonprofits and the Best Timing for Real Estate Deals
by Ricky Gautier
The Heller Fundraising Group is lucky to have some amazing partner companies who help support many elements of nonprofit endeavors. One of those partners is DBI Projects. They guide nonprofits through complex real estate ventures with excellent results. We spoke with our collaborator Ricky Gautier, a Senior Project Manager at DBI Projects and asked him to talk about real estate challenges for nonprofits, especially at this time. Our conversation is below.
Should nonprofits approach real estate deals now? Or wait until the pandemic is over?
During the first months of the pandemic, most nonprofits were understandably focused on immediate needs - staying open, pivoting to handle unique challenges such as newly remote workforces, juggling health protocols and quarantines, and staying financially solvent. We’ve been operating under this “new normal” long enough now to see that there can be great benefits for organizations which use this time to re-evaluate their real estate. Landlords have become much more open to lease terminations or significant rent reductions, and spaces that were once unaffordable to the nonprofit sector are now attainable.
For one nonprofit, we were able to save millions of dollars (92% of what they would have otherwise owed!) through negotiations with their existing landlords. For another organization, which had struggled with finding welcoming landlords due to the nature of the health services they provide, we were able to identify a landlord whose pre-COVID deal with a tenant had fallen through, and negotiated both a short term (temporary) location as well as a customized long-term solution.
Beyond the financial benefits of rethinking their real estate, savvy nonprofits have also been using this moment to rethink their space needs, some concluding that they can decrease their footprint and others that they need to decrease density. And, in order to be in a position to occupy a new or renovated space once things reopen, organizations need to be planning now.
Can’t a nonprofit just plan and manage a real estate project on their own? Must they hire a hire a project manager?
If you think an effective project manager is superfluous, think again. A capital project is a high-stakes balancing act, and an experienced and dedicated project manager is the best real safety net. We have seen countless examples of nonprofits exposed to millions of dollars in budget and schedule overruns as a result of poor management. A nonprofit can actually bring down project costs – and keep them down – if their project manager is able to set up effective cost-saving parameters and then keep the project within those parameters.
When a nonprofit has a capital project, when is the best time to hire a project manager?
At the beginning. We are able to have the greatest impact when engaged at the start of project so that we can guide our client through all possible scenarios and ensure that the project is structured for success. We sit down with stakeholders to understand how this project fits into the nonprofit’s overall mission and vision, and explicitly define the goals for the project. From there, we put together a project team and develop a realistic budget and schedule to achieve the best value for our clients.
At the same time, we recognize that some nonprofits may be mid-project, perhaps in the planning or even the construction stage, before discovering an acute need to engage a project manager. DBI Projects has developed a unique expertise in rescuing projects in distress. We create customized strategies that respond to the project’s particular size, type, team, and completion status, then roll up our sleeves and do whatever needs to be done, even if it’s not glamorous. We work proactively – with an empathetic awareness of the challenges at hand – and collaboratively across stakeholders to correct the project’s trajectory and minimize the impact on budgets and schedules.
What are the biggest challenges you see to a capital project’s success?
On something as complicated as a capital project, particularly here in New York City, there are countless opportunities for things to go awry, even under the best of circumstances. For nonprofits, these challenges often involve:
Engaging the right project team. Inexperienced leaders and understaffed project consultants are leading causes of project distress.
Setting realistic expectations. Unrealistic budgets and schedules often spell disaster as projects advance and teams are unable to execute as promised.
Providing proper oversight. Schedules and quality of work can easily slip without the oversight of an experienced project manager.
So tell us why nonprofits hire you - what is special about DBI?
We have a deep expertise in supporting nonprofits – almost 100 so far - with managing their real estate and capital projects, guiding them through the full spectrum of project processes, scenarios, and risks.
We have nearly two decades providing of unparalleled dedication to our clients and steadfast commitment to driving project success through every step and obstacle.
Your projects truly matter to us, and to our collective community; we are passionate about using our skills to support nonprofits. When a nonprofit engages DBI to manage its real estate or capital project, its leaders are able to focus on their organization’s core mission, and rest assured that there are dedicated experts managing budgets and schedules and handling any headaches.
No pointing of fingers - we take accountability for every aspect of the project and will personally work to resolve any challenges.
A Senior Project Manager at DBI Projects, Ricky Gautier guides non-profit clients through real estate and capital projects. With a background both in real estate development and in architecture, Ricky has the unique ability to lead complex projects through the full development cycle and stops at nothing to surmount project challenges of every nature. Currently, Ricky is managing a diverse portfolio of projects on behalf of NYHRE, the Society of Jesus, Democracy Prep, and Hebrew Public. rg@dbi-projects.com