By: Jon C. Olmstead, Executive Managing Director, Tenant Advisory Group
For Washington D.C.-based nonprofits and associations, real estate is usually a huge ledger expense — second only to personnel. Finding ways to minimize this cost is even more critical for smaller nonprofits, which often operate with fewer resources and under greater constraints than larger ones. D.C’s nonprofit sector, in a similar fashion to tech start-ups, boutique law firms, and retail, has to make adjustments according to a variety of shifting factors. And their needs for space are likely to change more frequently as development strategies and funding opportunities change.
Smaller organizations may worry about being overlooked or placed behind larger clients on the priority list. But nothing could be farther from the truth. Full-service commercial real estate firms like Cushman & Wakefield not only recognize the needs of smaller organizations, but more importantly have the depth of resources and expertise such clients require. As a matter of fact, the bulk of the firm’s business in Washington D.C. involves advising clients who occupy smaller rather than larger spaces. These numbers may be surprising, but per district-wide data we’ve gathered, just under a quarter of Cushman & Wakefield’s total tenant transactions were for clients seeking from 5,001 square feet up to 10,000 square feet.
Nearly half of Cushman & Wakefield’s clients between 2014 and the first half of 2016 had a requirement for 5,000 square feet or less. When combined, those seeking 5,000 square feet or less and those seeking from 5,001 up to 10,000 square feet, the total percentage of our clients seeking 10,000 square feet of space or less is about 73-percent. That means only about one-quarter of the transactions we advise on are for those seeking 10,000 square feet of office space or more. Additionally, when looking at the numbers for all DC commercial real estate firm business, 49-percent of DC’s total tenant transactions were less than 10,000 square feet. In other words, smaller projects are a larger percentage of our business than the total amount of space requirements district-wide.
Because they make up such a key segment of our business, and the real estate decisions they make are so vital to their organizational mission and success, these clients deserve and receive our full attention.
As a result, members of Cushman & Wakefield’s Not-for-Profit Practice Group act more as consultants than brokers for small organizations, helping them align strategic mission, financial, and operational objectives with real estate requirements. Our experts provide small tenants with a more complete picture of their available options by utilizing our in-depth knowledge of the market, other tenants’ experiences, and property owners’ perspectives. We track trends and forecast economic developments, thus equipping our advisors with current analyses on the latest market conditions. In turn, our clients gain an understanding of what tenants should expect from landlords and thus are able to make strategic decisions.
Commercially-focused sustainability advice that can inform a client’s real estate strategy can also be a key strategic benefit. This advice reduces cost, maximizes value, and supports delivery of a sustainability agenda for smaller organizations the same way it does for larger ones. Nonprofit clients require a platform that maximizes these savings so leadership can dedicate as much of their resources as possible to support their mission.
For Cushman & Wakefield, the payoff of working with nonprofit clients isn’t just the business, but also the opportunity to gain insight about everything from market trends to workplace strategies, while serving and supporting this vital community. These insights help us better serve the nonprofit and association collective and grow our knowledge base in the process. For small organizations, the benefit of having a real estate advisor act as a partner is more than just attaining the most favorable economic alternative, it’s about gaining a valuable resource to look to for all of their real estate needs.