With funding streams under threat, many not-for-profit organizations in New York City are looking to their real estate holdings to find creative solutions to help drive revenue.
On October 15, Herbert Smith Freehills Kramer, alongside JLL and Kasirer LLC, hosted an invitation-only, two-panel event in the Multimedia Conference Center at our offices at 1177 Avenue of the Americas to discuss how nonprofits can better utilize or capitalize on their real estate assets in an uncertain market.
HSF Kramer Managing Partner, U.S., Dan Berman opened the event with brief remarks ahead of the first panel discussion, which was moderated by HSF Kramer Partner and Chair of Real Estate, U.S., Jay Neveloff, on how nonprofits can monetize their property and assets at a time when public funding is under siege. Paula Carethers, Director of Real Estate, Archdiocese of New York; David Carlos, Head of Nonprofit, Education & Government Practice (Tri-State Area), JLL; and Scott Maxfield, Managing Director, Urban Investment Group at Goldman Sachs Asset Management, rounded out the panel.
Partnerships with private developers present opportunities
The panel began with Maxfield discussing asset management, noting that when nonprofits have a vacant outparcel adjacent to their existing owned property that they’re not interested in selling, they can partner with a private developer, contributing land as equity to the developer and reserving a portion of the building for use by the nonprofit, without having to expend a large amount of capital.
“The biggest thing is you have to pick the right partner,” Maxfield said. “You have to be really-aligned from a mission perspective.”
Maxfield advised that nonprofits can also develop a clean, predetermined exit horizon from a joint lender for the for-profit developer. Nonprofits can negotiate a right of first offer, which allows them to have the first opportunity to purchase the developer’s interest. Even if they lack the financial backing to buy it outright, this right can give them time to bring in a partner and potentially avoid having to sell the asset.
Sometimes, though, simply selling space makes more sense than joint development, according to Carlos, who said nonprofits may want to prioritize their respective missions rather than attempt to tackle a complex real estate project. Private developers are familiar with how to develop properties and take appropriate risks, but many nonprofits are not equipped to participate in a joint development.
“You have to build consensus among the [nonprofit] board to do anything and really go through the full universe of alternatives,” Carlos said. “When you lay out all the scenarios — the pros and the cons, and the risks — most of my clients default to, ‘We’d rather have the cash.’”
Not-for-profits identify novel ways to find space and finance real estate projects
When the Archdiocese was looking for new office space, they considered several options, according to Carethers. They decided to pursue a leasehold condominium structure, taking a floor in a building for 30 years, which provided them with the same real estate tax benefits as would ownership while also assuring the landlord that the space will be occupied for several decades.
“The 30 year condo structure is a creation based on a quirk in the New York State real property law, which defines real estate as including a lease for more than 30 years,” Neveloff elaborated. “It’s a unique structure — there are more fees, it’s complicated — but at the end of the day the benefit is that your space is exempt from real estate taxes.”
As the conversation shifted to financing, Maxfield touched on how lenders can provide bridge loans to nonprofits in anticipation of future contributions.
“If a not-for-profit has a capital plan in place, they have in many cases public and private sector commitments that may extend out for five to 10 years,” Maxfield said. “But their problem is that they don’t have that capital today and so they need to find a way to convert those future public and private sector commitments to dollars today.”
With a bridge loan secured by the receipt of the public and private sector donors, including anticipated donations based upon historic donation patterns, nonprofits are able to accelerate their plans, undertaking projects with large amounts of capital that they otherwise would have had to wait years to collect.
Real estate experts discuss the limitations of government partnerships
The second panel covered government cooperation and how to use real estate as a strategic business asset. Suri Kasier, CEO of Kasirer LLC, moderated the panel, and she was joined by Susan Sack, Managing Director, Real Estate, Robin Hood; Thomas Yu, Executive Director, Asian Americans for Equality (AAFE); Seth Pinsky, CEO, 92NY; and Dawn Pinnock, President and CEO, Center for Urban Community Services (CUCS).
“The backdrop that we’re all dealing with is increasingly challenging financial times,” Kasirer said. “As the federal government cuts back funding from states and cities, there will be less money available for not-for-profits.”
Urban Institute found that a third of 501(c)(3) public charities reported an interruption of at least one type of government funding source since January, according to research released in October 2025. Nonprofits in the U.S. receive nearly one-third of their funding, on average, from government grants, and more than 14,000 nonprofits nationwide could run out of cash within three months if government grants were completely cut, per data from Candid and Urban Institute. In New York state, nearly 1,400 nonprofits could run out of cash within three months, risking more than 361,000 jobs.
Kasirer emphasized the importance of ensuring nonprofits receive timely payment for government contracts, a persistent challenge many organizations face, and Pinsky shared 92NY's own experience with delayed city funding.
"In some cases, we have money that was allocated to us a decade ago, or plus, that we're still waiting to collect," Pinsky said. "The financing charges can be substantial, and finding the sources to cover that can be challenging."
Pinnock impressed upon the audience the importance of city government seeing their deals with nonprofits as a partnership and offering technical assistance to these organizations, which may not have experience in real estate.
“From day one, this is a deal,” she said. “This is a longstanding deal, and profits generated because of our mission go back to the community — which helps government, which helps New Yorkers.”
The affordable housing crisis demands creative solutions
The discussion shifted toward creative solutions for the housing crisis, and Sack and Pinnock both weighed in.
“We are seeing a looming crisis on housing preservation,” Sack warned. “For existing housing stock, revenues don’t cover expenses. That means properties are not being maintained.”
At Robin Hood, one solution is the New Stories project. The organization, in partnership with the New York Public Library and the City, took down the worn Inwood Public Library and built a larger mixed-use building in its place, with a new library on the bottom two floors and deeply affordable housing above. The same process can be applied to firehouses, police precincts, hospitals, schools, and property held by other public institutions.
Meanwhile, CUCS opened their first Safe Haven homeless shelter in the Financial District last year. The organization met with the NYPD, community boards, and parents to convey that their living experience won’t be diminished, providing them with building plans and proof of outcomes from similar projects.
Yu noted that when you purposefully engage in dialogue with communities, your loudest opponents can become your most steadfast supporters.
“Be upfront about what you can and can’t do,” Yu said. “We say ‘this is our mission and this is why we do it,’ and then, eventually, you’ll get enough people that come and see it your way, and they might even help you along the way.”
How to navigate the New York City real estate market
During the Q&A portion, one attendee inquired about a potential real estate bubble as debt comes due.
Carlos answered that commercial real estate in New York is not one market, but instead is extremely fragmented, making the overall vacancy rate of 18-19 percent misleading.
“The office market is extremely soft, and there’s plenty of empty buildings, and loans are not being paid,” Carlos said. “All of that is true. But, this is also true: rents have never been higher in NYC office space than they are today. So you have essentially two or three different markets happening simultaneously.”
Offering advice to not-for-profit leaders, Pinsky noted that the New York City real estate market is a boom and bust market.
“If you’re a mission-driven organization and real estate is not part of your mission, then you should be very conservative about how you interact with your real estate,” Pinsky said. “If that means what you’re doing is a little less financially savvy, it’s worth it for you, because surviving to carry out your mission is more important than making a few extra dollars.”
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