Nonprofits Have Same Space Demands as For Profits

WASHINGTON, DC—Non-profits are seeking out more efficient space and better brandings—just like their for-profit counterparts. As befitting their missions and budgets, however, they want these amenities in reasonably priced buildings, according to the eighth annual Nonprofit Real Estate Benchmarking Survey released by the CBRE Nonprofit Practice Group.

While this trend is unfolding nationwide, it is of particular importance to the Washington DC area, which is home to the most non-profits in the country, followed by New York City and Chicago.

"Noprofits are the third largest user of office in the area behind government and major law firms," CBRE VP Manny Fitzgerald, who leads the company's Nonprofit Practice Group, tells GlobeSt.com.

"So they are significant percentage of area's tenants—or occupiers rather—because a lot of associations own their buildings," he says. (The survey noted that 65% reported leasing their space, twice the number of those who own their headquarters building, which was 32.4%).

Some of the trends noted in the latest survey are long-standing ones. Nonprofits, particularly the one devoted to charitable works, have tight budgets with little room for extensive rent increases. That translates, at least in DC, into C class buildings—which are becoming more and more rare here. Hence these entities continue to move into the suburbs in search of affordable space. Several years ago Crystal City was the beneficiary of this migration and there are still opportunities in that submarket for nonprofits, Fitzgerald says.

New trends are emerging for this group however, that could make finding just the right space that much more challenging. Like their for-profit counterparts, nonprofits are greatly interested in efficient space concepts and increasingly branding.

The latest survey found that 41% of nonprofits were discussing reconfiguring their space. Additionally, 41% indicate they would operate more efficiently and effectively in an open floor plan—a significant increase from 2013 when only 31% responded favorably to an open-concept workplace.

"Branding is also a hot button issue for nonprofits, which makes perfect sense," Fitzgerald says, as they seek to spread awareness of their various missions.

According to the survey, more than 41% indicated their office location is either “very important” or “extremely important” to their brand. Many are headquartered in large metropolitan areas and more than 42% have occupied their current headquarters for more than 10 years.