Nonprofits Mark Growth by Separating

NEW YORK CITY-After 25 years of cohabitation, two nonprofits are separating. The Community Resource Exchange and FoodChange have determined, after several relocations, that no space seems to be large enough to accommodate their mutual growth. CRE is moving to 10,000 sf at 42 Broadway. FoodChange will occupy the entire 17,000 sf at 39 Broadway.

The move is a reflection of both organizations’ steady growth over the years, both in size and in mission. CRE, back in 1980, was formed to provide technical resources to the city’s grassroots nonprofits. Community Food Resource Center–the precursor to FoodChange–was primarily a clearinghouse and advocate, fighting malnutrition among the poor. Both groups shared about 2,500 sf above a restaurant on Murray Street. In 1992, they relocated to a 7,000-sf floor at 90 Washington St. They moved to the 10th floor at 39 Broadway in 1999. FoodChange subsequently leased an additional 4,000 sf on the ninth floor.

They called in their long-time real estate advisor, Charles S. Isaacs, president of CSI Consultants Inc., a brokerage and consulting firm which primarily services the nonprofit community, to help alleviate the problem. At the time, there were almost eight years left on the 10th-floor lease, and four years left on the ninth-floor lease. CRE was willing to move out, under certain conditions, but it would have to be released from its lease obligation on the 10th floor. FoodChange would take over the entire 10th floor, but it would have to be released from its obligation on the ninth.

Isaacs contacted Tom Hettler of the Lawrence Group, the building’s leasing agent, and proposed that CRE lease space in the owner’s portfolio that was currently vacant, and that the owner, in turn, grant the necessary releases. While CRE needed more space, it could not pay more rent than it was already paying. It also required built-out space to exacting specifications, including a conference, training and translation center with the owner absorbing all the costs. Negotiating a deal that met these objectives took so long that three candidate spaces were leased by other tenants before agreement was finally reached on a fourth.

After 14 months of negotiations, CRE’s new lease and all the releases were signed. CRE’s new space contains 40% more rentable area, and 65% more usable space, than it previously occupied, and its rent outlay was kept almost exactly at its previous level. The landlord agreed to build the above-standard layout, and CRE’s supporters stepped up to help with its share of the cost.