So You Want to Buy a Building? Tips for Navigating Real Estate for Nonprofits with Jon Denham and Paul Wolf : Successful Nonprofits

Episode 109

So You Want to Buy a Building? Tips for Navigating Real Estate for Nonprofits with Jon Denham and Paul Wolf

Listen on  iTunes    Android     Stitcher  Libsyn

Episode 109

So You Want to Buy a Building? Tips for Navigating Real Estate for Nonprofits with Jon Denham and Paul Wolf

Listen on  iTunes    Android     Stitcher  Libsyn

by goldenburggroup

The physical construction phase is a fraction of the overall duration of development.

Leasing, buying, or renting the actual physical premises for your nonprofit can be daunting. Real estate transactions can go south by mismanaging development plans or failing to establish necessary relationships with regulatory bodies.

Jon Denham and Paul Wolf founded Denham Wolf Real Estate Services to help nonprofits assess financial viability and plan, acquire, and develop real estate. Today, Jon and Paul talk with Dolph about their philosophy on successfully navigating real estate issues for the nonprofit.

****Timestamped Highlights*****

(4:12) A major presence in the Broadway box
(5:38) Government: a major player for sure, a major partner we hope
(10:40) Fanning the flames of life back into old firehouses
(22:53) A Costco for real estate

If you have a great mission, real estate is easier to acquire.

(26:47) Plan plan plan (ahead)
(30:05) Buffer time
(32:45) Reality check!
(35:00) Jon and Paul add to Dolph’s “Nerd Sunday List”

Links:

Jon and Paul’s website: www.denhamwolf.com
Facebook: and Instagram:
LinkedIn:
The Rockaways
Red Hook
Inwood and The Met Cloisters:
Read the Transcript for Episode 109 Below or Click Here!


Transcript – Episode 109 – So You Want to Buy a Building? Tips for Navigating Real Estate for Nonprofits with Jon Denham and Paul Wolf

Efficiency has become a key metric in nonprofit real estate.

Dolph Goldenburg: Welcome to the Successful Nonprofits™ Podcast. I’m your host Dolph Goldenburg.

Location, location, location. Location is a maximum that is as relevant to the world of nonprofit real estate as it is to Sally Home Buyer. There is a host of layers to nonprofit real estate, and I know this because I lived through a major building renovation as a first-time executive director. I was responsible for providing affordable housing in 42 percent of the counties in the state of Georgia as an executive director of another organization, and I helped one Brooklyn Organization, while I was their interim executive director, identify a new space after their rent went from $70 per square foot to $270 per square foot. So, I have learned this lesson really, really well: Essentially whether you are buying, leasing or renovating, there are no two real estate deals that look alike.

This is especially true when you’re a nonprofit that’s trying to figure out how you’re going to pay for it all. For that reason, I have also learned that as an organization, it is in your best interest to have a seasoned, creative and experienced professional to help guide and structure your decisions and your process. So, I was really thrilled when Jon and Paul and I connected. Jon Denham and Paul Wolf are founders of Denham Wolf Real Estate Services, an agency devoted to working with New York City’s nonprofit community around issues of real estate development, project management and transactions. Their focus is on financial viability, of course, but also on the societal and environmental wellbeing. So, today’s conversation will help staff leaders and board members think about creative and sustainable ways to achieve a major move, purchase or sell a property or embark on a major renovation project. So, join me in welcoming Jon Denham and Paul Wolf,

Hey Paul and Jon, welcome to the podcast.

Jon Denham and Paul Wolf: Alright, thank you very much. Good morning, Dolph. Thanks for having us.

Dolph Goldenburg: So, share with me, what was your maybe first most impactful mission driven real estate project?

Paul Wolf: From our inception, our [mission] has always been to have mission leading real estate follows. So, with every project we’ve always taken that approach. Early on, we did a major theater project on 42nd street. Jon, do you think it’s… the Scandinavia House?

Jon Denham: I would say the Roundabout Theater Project in Times Square.

Dolph Goldenburg: Tell us about the Roundabout.

Paul Wolf: The Roundabout is I think the second largest nonprofit off Broadway theater company in the country. They had quite an interesting history. They were on the verge of bankruptcy. They occupied a basement in a supermarket for years, but they have an opportunity to take a space [with] the historic theaters on 42nd street, and it was a landmark building spectacular project, but a major undertaking for any institution. For the Roundabout, this was a step that would really take them from being a small nonprofit off [Broadway] theater company to a major presence really in the Broadway box, a much higher profile. They had to raise more money than they had ever raised before. Our job was to make sure they were spending the money appropriately, that they’re being great, careful they were planning because you don’t want to start a project to get halfway through and realize, “Oh, we can’t raise the rest of the money.” So, being very diligent from the get-go, uh, to make sure that they were tracking their funds carefully and deploying the resources properly.

Jon Denham: Jon Denham here. I would just add to that, one of the great things about the project, was one of our projects literally beginning in the first week after we opened our offices. Right from the get-go, that project involved a variety of aspects and a variety of our skillsets across all of the financial issues, the lease issues, the design and construction issues, the city government interaction issues that are almost always part of our projects here in New York.

Dolph Goldenburg: Let’s unpack some of that and start with some of the government issues. I know when a has an executive director and we were doing a major renovation of a building in Philly that was built in the 1860’s, we often had to interact with the government around the front of the building and making sure that it was still historically accurate. So, talk to me about how you work with governments.

Jon Denham: In New York City, I think, uh, at least major municipalities, a government is a major player and hopefully a major partner in nonprofit real estate projects. We certainly try and make sure, with our own background and our own network and then that of other team members we bring to our projects, that we are trying to make the government an ally and a partner as opposed to an adversary. Now, certainly there are times whether it be some tricky code interpretation for a property, whereas you referenced landmarking and a sort of local neighborhood acceptance of a projects is frequently an issue, too. We always try and start with the presumption that the government can be an ally. Certainly, here and in most localities these days, government recognizes the benefits of nonprofits and community-based organizations, and also recognize that some of their challenges with respect to real estate. Even though sometimes they can’t get out of their own way with some of the, red tape at times, usually there’s a, their heads around the right places in terms of supporting the overall enterprise.

A sign of truly successful nonprofits is that they plan well in advance. A lot of challenges can be mitigated if you plan well.

Paul Wolf: And in this project in particular, the Roundabout was very good at presenting the rationale for restoring this historic theater on 42nd street. It was important for nonprofit theater on 42nd street, and the city supporters direct capital grounds. So, they were a major contributor to the overall project. Just an interesting anecdote: we were literally hired on a Tuesday or something, and two days later the building that housed the lobby entrance (because it was, the lobby was on 42nd, the theaters on 43rd) the building that houses the lobby collapsed, and our lobby was wiped out because there was a construction project adjacent to that building. The building came down, and that was an unexpected challenge. They had just hired their team and were ready to get going, and now half the building was gone. So, that posed an interesting challenge, but the city was helpful across the board in getting that resolved and Roundabout had to be resilient in how they re-envisioned how they’re going to access their theater at that point.

Jon Denham: Dolph, one last thing about landmarking… We are certainly believers in the idea that has really taken hold in most places that buildings, no matter how architecturally interesting and valuable and historic they are, if they are going to be around for 100 years, 200 years or 300 years, it’s almost inevitable that the greatest use of the building will change over that time. With the change in use naturally comes some change in the architecture typically. I think we really believe in advocating for our clients, and as long as they make a compelling case for their use of the building, the government agencies will typically and the community around them will typically be much more amenable to the changes in the architecture that are required for changes in use. If it’s a proposed use that is not compelling and not desired by the community, then it’s not going to fly, but as long as there’s a compelling case there for what the organization is going to be doing [in and] from the property, it’s a much easier process.

Dolph Goldenburg: You know, it’s funny you say that. At the organization in Philly, we put a wheelchair ramp on the front of the building, and of course, we had to get a permit for that. Of course, there were not wheelchair ramps in 1865. We went down to the city and they tell us, “Well, this ramp encroaches on the sidewalk by an inch and a half too much.” I respond, “Okay, so here’s our options. It can’t be too small to meet ADA requirements. It can’t encroach on the sidewalk, but there weren’t wheelchair ramps in 1865. What do you want us to do?” Eventually the city’s like, “You can have an inch and a half of the sideline. Thanks. We appreciate it.” So, I agree with you. For the most part they’ll work with you, but you have to tell them the right story to get them to do it.

I also think, though, that you’ve structured some really unique deals with the city of New York, and I think that other nonprofits and other cities really of all sizes could do this because most cities in America now have buildings that maybe they constructed in the early part of the last century or the mid-part of the last century that they’re no longer using. So, I know that you’ve actually worked with New York to help essentially retrofit things like firehouses, nursing homes, things like that, into usable nonprofit space again. Can you share a little bit about that?

Jon Denham: Sure. Just a couple of quick examples. So, we finished a couple of years ago a really interesting project which was the conversion of a 130-year old a firehouse in East Harlem into a small but very active, cultural center. That was a project that came from the city’s recognition that 130-year old firehouses were not necessarily designed or located where the needs were for fire protection in the 21st century. So, the city of New York, disposed a number of these older firehouses and turned them back to community groups for a variety of uses. So, yeah, that was a wonderful project where it was challenging making a firehouse into a cultural center for the 21st century, but really successful in terms of keeping the property sort of in the public realm but with a private, not for profit.

Another one just quickly that is one of our favorites. We’ve been working for all of 18 years on a series of projects for an organization called the Adobo Family Healthcare Center, which is located in the Rockaway Peninsula out in Queens. That is a project where it is an organization that had been operating out of a city-owned health clinic for a couple of decades. We helped them acquire a vacant city property nearby and then redevelop it into their sort of modern state of the art health center. Fast forward to today where we’ve broken ground on the expansion of that, having helped them acquire the rest of the city-owned property that was adjacent to them. So, that has been a great example of a long running partnership between us, the organization and the city government on the use of the land there.

Dolph Goldenburg: So, for nonprofits that are interested in trying to work with their local city to identify some city-owned space, what’s the best way to go about doing that?

Paul Wolf: Various mayoral administrations in New York having time said that [they’re] going to sell everything that the city owns or we’re going to put it out and get top dollar or repurpose it these days for affordable housing. In New York, really the days are gone or free space from the city for nonprofits. The best you can hope for is that there’s a development where the city consents to giving additional development rights to the developer in exchange for putting an affordable space for nonprofits. The idea of free space in the city or anybody really hasn’t been around in 18, 20 years. So, I think it’s hard, but I think relationships matter. Particularly, your local municipality, if you’re talking in New York City, to your local council member, they can tell you when things are coming down the pike, if a development that’s planned here. If they hear from the community that there’s a desire for say, additional healthcare services, they can advocate for when the city puts out an RFP or Request for Proposals on the street that developers must make space for affordable healthcare. Then you can be one of the respondents who tries to get into that space. I will do the same for some [arch] programs as well, but not a lot of free city space laying around.

Jon Denham: I would add on it on a more tactical level that in many cities certainly here in New York, that it’s very hard for an individual organization to keep track of all the activity and all the potential opportunities in a city of five boroughs and 9 [m]illion people and dozens of city agencies, many of whom are doing projects or putting real estate opportunities out into the marketplace, very hard to keep track of it all. So, one of the things that is just conceptually is a good idea for an organization to try and maintain good relations beyond the radar screen of the mayor or the sort of the central city government, beyond the radar screen so that at the at thecentral level, the government knows that you’re interested in opportunities that you’re looking and from the other direction stay in very close contact with whoever your local council person is or district manager or district leader is in the areas that you want to be located in so that you have other people looking out for you and keeping eye out for these opportunities.

Meeting the organization’s programmatic needs is more important than preserving the integrity of design.

Paul Wolf: Also, what’s most important is that organizations have to be prepared to take advantage of an opportunity. [We call it] intelligent opportunism because eventually when these things come out in the market (the city has a space they want to put out for nonprofit), a lot of people raised their hands, but unless you actually are prepared – you know what you want and what your capacity is and how much money you can raise or how much you’ve already raised – you’re just not going to be eligible. This happened a number of years ago on Battery Park City. We were working with an organization called Poet’s House, and there was a space available for a 65-year lease at a dollar basically, and a lot of realizations wanted this, but Poet’s House was ready. They had done the work. They were prepared. The city knew they would be a successful partner in this project. In this case, [it was] Battery Park City. I thought I knew they’d be a successful partner because nobody wants to be part of a failed undertaking. The organizations that get their house in order in advance in anticipation or the better partners for the city.

Dolph Goldenburg: So, it’s kind of like what our parents used to tell us: It’s better to be prepared and not have an opportunity than to have an opportunity and not be prepared. Jon, one of the things that I think, and I think you touched on this also, Paul, I agree with you. I think those relationships are critically important, and at least in my experience, whether it’s New York City or Philly or some other city, part of it is figuring out who your champions are going to be inside City Hall, whether that’s a council member or a really seasoned bureaucrat who really knows how the system works and can make it happen for you. In a city like New York, there’s nothing like having a borough president on your side. You know, people really underestimate the power of the borough president, but there’s nothing like having that person on your side. I think maybe you all were too modest to say this, but I also think it’s a good idea to have relationships with developers as well. You know, when you have relationships with the developers, you can say, “Hey, what projects are you looking at? What projects might you need some nonprofit partnership on?”

Paul Wolf: That is an interesting point, particularly with the advent of Hudson Yards, which is a massive development opportunity. It is opening up a lot of private sites adjacent to the major development as well because developers know that we work with nonprofits. We would get calls on a regular basis from developer saying, “Hey, I’m looking for, you know, an arts organization that can put dancers in the windows because it will help me sell my condos upstairs, so I’m going to do a good deal with a nonprofit that gives me some that brings some life to the street or maybe one that has kids programs because I want to solve family science departments.” So, it’s interesting, and we get those interesting calls when people think that it’s going to help them with their project.

Jon Denham: Dolph, if [I could be] a little bit immodest, since you kind of give us the opportunity… one of the things that we do for many of our clients who are in the market looking for space and opportunities, we’ve developed a real thorough and effective process for us. We essentially act as sort of a hub for many of our clients who are looking for space. We connect them and maintain tabs and communications with a wide array of both for profit and nonprofit developers who are also out there all the time, spending all of their day jobs, frankly looking for properties, looking for opportunities for themselves and at the same time looking for partners and tenants which often can ultimately be our nonprofit clients. So, we sort of act as a hub and as a point person to keep tabs there and literally often are a matchmaker between our clients is tenants or partners and those developers and also keeping tabs on various properties that are in play in the marketplace, too. So, being that kind of central hub of almost a space bank or a network bank for our clients is a key part of many of our projects.

Paul Wolf: Also, we know a lot of the city folks as well. So, we can also often help attract city funding to a project if your organization, again, has their house in order and for private philanthropists as well. Foundations like being part of a project that has that sort of communal support to make it successful.

Dolph Goldenburg: Again, it all boils down to relationships and someone who can help you broker those relationships.

Paul Wolf: I think it’s important, but I have to say it’s all about the missions about the programs. If you have great programs allow those relationships will come. We have organizations saying, “How do I get into something like this?” We tell them that it’s not about the real estate, it’s about the organization. It’s the mission, leads mission has programs that has to be compelling. If all that’s compelling, the real estate is much easier to follow through on. It’s still not easy, but it’s easier.

Intelligent Opportunism
Be prepared to take advantage of an opportunity. An organization with its house in order in advance is a better partner.

Dolph Goldenburg: Well, we are going to take a short break, and when we come back, we’re going to talk about some of the tough challenges that nonprofits face with regard to real estate in New York City.

Although I am not well-versed in building design, I have a depth of knowledge about board design. At its best, the board of directors can provide a firm foundation for a nonprofit strengthening its weak points. It also can help expand the reach into the community and build those relationships with the civic leaders and the politicians that you need to get the real estate deals, but at its worst, it can be like a conduit for an army of termites to march in and destroy the structure of the agency and its mission from the inside out. You of course want that strong foundation type board, right? You might be wondering how to get that board. Well, not surprisingly, kind of like a building. Our board is built member by member and it’s built with an ongoing process of training, cultivation and evaluation. This is something that we do all day long at Successful Nonprofits ™ and so I would encourage you to check out our website, www.successfulnonprofits.com and see how we might be able to create an action plan that will help you, your board be as strong as it needs to be.

Hey, welcome back, Jon and Paul.

So, I promised that we would talk about the biggest in real estate, really for nonprofits in New York City, and the reason I thought it might be a great idea for us to have this conversation is that New York City is probably among the three toughest real estate markets for nonprofits, but organizations, whether they’re in Atlanta or Topeka or wherever, probably face similar problems, just not on the same scale. Rent might be expensive, not as expensive as it is in New York or San Francisco, but it still might be expensive, so I’m hoping that maybe you could maybe share some of the greatest challenges that nonprofits face and ways to overcome those challenges.

Paul Wolf: That is a full question in there. I will say that the challenges that most organizations face tend to be financial, and it really is about how you manage… Real estate is such a substantial part of part of people’s budgets. Typically, it’s the second largest line item in a budget. How do you plan for something that [inaudible] major investment? Typically, the cost goes up over time and typically at a faster pace than you are than your income grows. So, how do you make those kinds of plans? 20 years ago, when we started, 10 years ago now, organizations face the same challenges, and particularly where a lot of the public sector funding support has dropped out and private sector has hopefully stepped in and many of those cases, there’s a different kind of scrutiny as well on the decisions you’re making. We deal with this now [with] some hedge funders who are looking for metrics on how successful you are deploying your resources and it points to ways to be efficient in how you use real estate, which has led to a lot of coworking ideas or open design or more thoughtful design… how to be more efficient with what you have. We did a project a number of years ago with an organization called Art New York, which was a service organization for off-Broadway theater companies. To quote the executive director of New York, she said, “We need a Costco for real estate. We need to buy in bulk, and then, you know, sell cheap.” With her vision, we were able to actually secure a [full floor] in the town office building, get the support of the city, help fund for a large chunk of capital and get 25 organizations to co-locate, and they gave up some amount of exclusivity, but they got shared space, they got a sense of community. So, to address the cost issue, co-location was one possible solution, but the cost is inevitably the lead challenge.

Jon Denham: Paul has just spoken to the cost and financial aspects, and one thing I would add to that is that we often frame our discussions with clients about the challenges and about the dimensions of real estate using the three-legged stool analogy, financial challenge, and the issues being one physical being another and then lastly, and most importantly, an organizational challenge. Just to quickly add on that note, on the organizational front, I’m tying to what you were speaking to on the break, Dolph, most of our organizations here in New York can either outsource or otherwise find ways to solve the financial, the physical [such as] good architects, good banking relationships and so on. It’s the organizational and leadership aspects, frankly, that are impossible to outsource effectively and are in many cases actually the even greater challenge because they’re almost… solving your organizational issues, which is often on precedent to solving the financial issues and (as you alluded to) having a diverse, well-rounded, consensus oriented, not a board where everybody is a “yes” person is just so fundamental to a successful real estate project just as it is to a successful organization in general.

We see our clients go through real estate projects which are stressful and high stakes. We see them go through it typically [inaudible] necessarily strengthening building and really working their board significantly and oftentimes with a strain and chain transitioned among their senior management as well.

Paul Wolf: What we’ve definitely seen as assignment of truly successful nonprofits is that they plan well in advance. It’s very hard to manage real estate project in crisis, and oftentimes, we’ll get calls and say, “Oh my God, I have six months left on my lease. I got to leave. What do I do?” That’s just not enough time, and a good leader working with the board anticipates these challenges and does a lot of plans where you can address it in a more methodical way. We have organizations that come to us and say, “We’re thinking about doing something six years from now,” which sounds like a long time, but if it’s a major capital project to figure out what you’re going to need to get it done to get the plans and exactly what are the core, the core objectives are you’re looking for to raise the funds to find the site. It takes a long time. So, I think that a lot of the challenges can be mitigated if you commit to planning early,

Dolph Goldenburg: I could not agree with you more. Whenever an organization says, “My Gosh, our lease ends in six months. What are we going to do?” it is definitely too late. I know once upon a time, I stepped in as an interim executive director, and they had six months left on their lease; they really were not sure where they were going to go. I’m say, “Well, the first thing that we’re going to do is we’re going to try to negotiate a one-year extension with the landlord. We’re not moving in six months. It’s not possible.” Even 18 months is really super ambitious. How much planning time do you think – I know every nonprofit is different – but how much planning time do you think a nonprofit needs to be able to acquire new space, make whatever renovations they need to and be able to move in?

Jon Denham: Picking up something you mentioned at the beginning of our conversation, no two projects are alike, but there are certainly some commonalities and so on. On one end of the scale spaces and projects that involve a relatively straightforward, for instance, relocation of administrative space where the physical requirements of the space are relatively straightforward. There are no frontline services that are going 24/7. Those are definitely more simple, and if you’re going into a leasing environment, as you said, a year to two years of total process is a reasonable time period

Paul Wolf: Depending on scale.

Jon Denham: Yeah, but if you’re talking about projects with complexity in terms of program and physical design and scale and financing at the other end of the spectrum and also spaces that are really, you know, generational moves for the organization and may be the result of a significant growth opportunity or expansion, etc. or geographic move, those are projects that (typically to be done right), you’re talking about three to five to even a decade of total planning, development and design and construction.

Paul Wolf: On the straight up office side, scaling makes a big difference. If you’re talking about relocating a 1500-square foot office, have very plain vanilla needs, a couple of offices and conference rooms and workstations, it can happen fairly quickly. If you have 15, 20,000 square feet, want to custom design this space, want to do some open plan, some offices, want to be near public transportation, so it’s a highly desirable neighborhood, then you really did give yourself more like 1-2 years to get that done, and it could take longer. We’re doing a large project now in Brooklyn, which this office space and I think [inaudible] from the search to open your doors will probably be just about two years, just over two years on that. So, it does take time. New buildings, new construction, much longer.

Jon Denham: Contrary to popular belief in many cases, the actual construction phase, the actual physical renovation or the actual new construction in any, wherever you are on that spectrum, the construction phase, in fact, is actually a fraction of the overall duration. This connects back to what we were talking about planning and preparation. It’s really a “measure twice, cut once” kind of thing. If you plan properly, tee it up, you get everything lined up and have a well-organized game plan, the construction phase can and should be the shortest chunk of the overall schedule.

Relationships matter on many levels in real estate – with government, foundations, developers, and civic leaders.

Paul Wolf: Bumps do happen, and they will happen in every project. Trying to plan to anticipate them and what happens when they come up makes a big difference in keeping your project on track. But yes, we’re big believers in can’t start too early the conversation to at least get the [yourselves] prepared.

Dolph Goldenburg: That probably means some type of contingency planning if a bump does happen. For example, you know, even if an organization’s planning five years in advance, when their lease is up, their lease is up, and you know they have to have some kind of contingency plan [if that space is not ready to move into].

Paul Wolf: We spent a lot of time doing that as well. We do a lot of work with performing arts groups, and we tell organizations every time to not plan your grand opening specifically the week after constructions opposed to be done. Things inevitably happen. So, a lot of it is trying to build in some buffer time. If you absolutely must be in by January, the schedule is to get you in by August or September, so you have some cushion, but still things do happen. We were working with the foundation who wanted to actually purchase a commercial condo rather than the lease space and because of some complexity in the acquisition, it took a little bit longer than unexpected. So, when their lease expired, they ended up going into a we-work/ shared space for a lot six or eight weeks to bridge the gap. For them it was just administrative. That was fine. They could do that for a little bit of time. If it’s program related, you really don’t have that opportunity. You can’t ever go dark. You have to make sure that you have some overlaps, so your program’s never get impacted.

Dolph Goldenburg: Right. And that’s probably also for programs where your partnerships come in handy. So, you know, you can call up some of your partners and say, “Hey, we need some programs face for the next six weeks, can you help us out?”

Jon Denham: Yes. I think that having those types of contingency plans where you are preparing… Many of these projects will inevitably involve some kind of temporary space, some kind of sharing, some kind of transition and so that ability to utilize friends and other folks in your network who can help with your space needs on an interim basis can be very, very useful.

Dolph Goldenburg: It also sounds like for the planning piece to financially budget for that buffer… so budget for the fact that you might be paying rent in two places for three months, but it means you’ll have a smoother move.

Paul Wolf: It’s interesting you bring that up. We’ve had people who say, “I can afford the budget. Just when you put on that contingency piece, I can’t afford it. I mean, if we just get rid of that, I can afford the budget.” Then, we argue aggressively saying, “You’re going to use substantially all of that if not all of it. So, you have to plan for that, and your projects should shrink such that you can accommodate that contingency.” We have that argument a fair bit because people see the numbers, and you put in 10 percent design contingency, 10 percent construction contingency, swing space contingency, it gets up there, but it’s the smart way to do it.

Jon Denham: I’m always surprised. I’m still surprised after all these years from the executive director who is embarking on a project and says, “Well, when we get to the construction phase, we simply are not going to have any change orders. We’re not going to experience any surprises. Nothing that can occur pursuant to which I will agree to increase the cost of the construction. By fiat, there’ll be no such thing.” That’s always a head scratcher in a place [inaudible], and we said, “Alright, we’re going to take a step back and talk about what is the fall back here. Why are we approaching this with that philosophy?” That’s a distinct warning sign about the sort of reality check of the organization’s approach to the project.

Dolph Goldenburg: I would also say probably the resiliency of the organization, you know, because if you can’t figure out how to raise that extra 10 percent, you’re probably going to have a really difficult time once you get into the space.

Paul Wolf: It’s always about program or something about real estate. It’s not, I want a 50,000 square foot building someone [inaudible] they run these programs. If during the process the building goes from 50,000 feet to 42,000 feet, you can still deliver on the programs. It’s still a victory. We had a client a number of years back. We had a fabulous architect designed a gorgeous building. We got the cost estimates back, and it was just too expensive. Our recommendation was we have to remove the top two floors of the proposed new building. We said this to the board, and they listened to us… [We could still] meet our programmatic means. The architect stood up and said, “No, no, no, no, no. You have to preserve the integrity of my design. Just raise more money. No problem.”

So, we took two floors off the building. Can’t raise more money.

Intelligent Opportunism Be prepared to take advantage of an opportunity. An organization with its house in order in advance is a better partner.

Dolph Goldenburg: That’s awesome. So, Paul, Jon, I have to tell you, I could talk real estate with you all day long, but I got to get in my Off-the-Map question. I am so excited about this question. I do a lot of work in New York. I don’t live in New York. I do a lot of new work in New York some years like this year. For about six months this year I’ve had an apartment in Bushwick because I’m in New York so much it just makes sense to crash in my apartment than it does to, you know, rent a hotel room for $300 a night. So, whenever I find myself, which is somewhat often in New York on a Sunday, I do what I call Nerd Sunday and those are the non-touristy New York things. So, tourists for the most part don’t go do them and neither do New Yorkers.

So, I’m going to give you a few examples of some Nerd Sundays that I have done in the last year and then ask you what should be added to my Nerd Sunday list as well as our listeners’ Nerd Sunday list, should they find themselves in New York. For example, last year I went out to the Queens Museum on the 7 train. I also, of course, saw the ruins of the World’s Fair. I went to Teddy Roosevelt’s birth home on East 20th, completely miss-able. You can live a full life without seeing it, but I have now seen Teddy Roosevelt’s birth home. I went to the transit museum in downtown Brooklyn. I went to the Cloisters. Lot of New Yorkers go there, but not that many tourists go there. I also walked the 13-mile stretch of Broadway. Most people typically, you know, don’t get above the park, and I just kept walking and walking until Broadway ended. What should I be adding to my Nerd Sunday list?

Jon Denham: First off, Dolph, doing interesting real estate tours like that is absolutely not nerdy. There’s nothing nerdy about it. Let’s get that straight.

Dolph Goldenburg: Okay. Okay. We’ll rename it to just Sunday, non-nerdy Sunday.

Jon Denham: Yeah. Not that I have anything against nerdy occupations.

Paul Wolf: I should just say that Jon and I for years – this is not on a Sunday – have taken a day each summer, got on our bikes and have done a 30, 40-mile bike ride around the city to usually two or three boroughs to see what’s happening on the ground, which is not a nerdy thing to do at all. It’s actually quite exciting. We do see a lot of things you wouldn’t normally see otherwise, and it’s a phenomenal walking city and it’s a great biking city. So, I would encourage that, but I know we have some specific things that we like.

Jon Denham: I will say one more thing before we answer your question. I have driven my wife and three kids to distraction to the point where now anytime that family’s in the car driving around or past or through any part of the city, outside of our neighborhood, my kids have learned to preemptively ask me, “Dad, we’re not going to go look at old buildings today, are we?”

Dolph Goldenburg: That’s awesome.

Jon Denham: One thing I would definitely recommend you add to your list because it’s just an amazing, amazingly interesting set of contrast and in New York is to check out the Rockaways if you never have. Far Rockaway, which is sort of the downtown hub or the Rockaways, which is like a small-scale little city parked at one end of the peninsula of this amazing barrier, beach island of the Rockaways. From there, if you jumped back on the subway, a few stops. You can go into, for instance, the [Auburn] section or a little further down, and you’re on this amazing beach looking at the Atlantic with acres and acres of city blocks of undeveloped property in every direction. So, it has all these amazing contrast, very little understood, little known part of New York, very urban, very beach, very almost rural in places. So, that’s one I put on there.

Paul Wolf: I would definitely add… you mentioned the Cloisters, which I think is fabulous, but people who go to the Cloisters, then turn around and go home, stay a little while. It’s a spectacular park there, and there’s hiking trails and beautiful views over the Hudson. It’s just awesome. The Cloisters is great, but the park is also fun. They have great little restaurants around… I’m a big fan of [Inwood]

Dolph Goldenburg: So, I have to tell you, I actually did some hiking in that park, and it was a beautiful summer evening. There were a lot of couples that were having their wedding photos done underneath the arches in that park. Yeah. That’s amazing.

Jon Denham and Paul Wolf: That’s beautiful. Yeah. So, if you want more, we can go on.

Jon Denham: I got one more. It’s another one like the Rockaways. It’s a great place to see New York’s waterfront. It’s Red Hook in Brooklyn, which is going through this amazing, amazing transformation from one of the last really big, really strong working waterfront shipyards and the like and historic waterfront uses to everything from Ikea to new housing and so on and so forth. So, Red hook is just a fantastic place to go walk or bike around and see a 1800sof New York, 21st century New York in a really diverse mix of stuff.

Dolph Goldenburg: That is great. I’ll work on a link to all of those things in our show notes. I also might link some of my own favorite, a non-nerd Sunday things to do in the show notes as well. So, if you are either in New York or happen to be going to New York and want to do some non-touristy things, you know, like you don’t want to eat at the Olive Garden in Times Square, Check out this list. So, Paul, Jon, thank you so much for joining me today. I have really enjoyed our conversation. I’m being hidden right now by my mic, but I’m smiling from ear to ear. Listeners, you can find Jon and Paul at www.denhamwolf.com. They also have a very active social media presence, so we will link to their Facebook, Instagram and LinkedIn pages in our show notes at www.successfulnonprofits.com. They are always looking for nonprofit partners that are ready and interested in working with them and the New York region. They’re also looking for real estate professionals with a passion for giving back. That’s right. Denham Wolf is often hiring, so check out their website for openings.

Hey guys, thanks again. I’m so glad you came on.

Jon Denham and Paul Wolf: Thanks so much. This was great. It was interesting to hear where you like to go on Sundays in New York, too. Yeah. Great fun. Thank you very much.

Dolph Goldenburg: Thank you.

If you want to connect with denim wolf on Facebook, LinkedIn, or Instagram, be sure to check out our show notes at www.successfulnonprofits.com. Paul and Jon have really made me think about something important and that’s the importance of partnerships as you are looking at any major real estate endeavor. I hope maybe you’ll go online and share some of your key takeaways with me and with our listeners, and while you’re in the sharing mood, I would be just so grateful if you shared this podcast with those in your community by rating it, reviewing it, or maybe just sending them an email link. That is our show for this week. I hope you have gained some insight to help your nonprofit thrive in a competitive environment.

(Disclaimer) I’m not an accountant or attorney, and neither I nor the Successful Nonprofits™ provide tax, legal or accounting advice. This material has been providing for informational purposes only and is not intended or should not be relied on for tax, legal, or accounting advice. Always consult a qualified licensed professional about such matters.

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