NON-PROFITS MARK GROWTH BY SEPARATING CSI Consultants Inc. Brokers the Deal

After 25 years of cohabitation, two of New York’s most prominent non-profits are getting a separation. Incompatibility isn’t a problem, but real estate is. Community Resource Exchange (CRE) and FoodChange (formerly Community Food Resource Center) have determined, after several relocations, that no space seems to be large enough to accommodate their mutual growth. CRE is moving this month to 10,000 square feet at 42 Broadway, leaving its portion of the 17,000 square feet jointly occupied at 39 Broadway to FoodChange, which is set to fill the entire space virtually overnight.

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 non-profits. Community Food Resource Center (CFRC) was primarily a clearinghouse and advocate, fighting malnutrition among the poor. Both groups shared about 2,500 square feet above a restaurant on Murray Street.

By 1992, CFRC was running its own food programs, including a model soup kitchen in Harlem, and had become one of the city’s primary, and most effective, advocates for economic justice. CRE had become nationally known as the premier management consulting firm for non-profits. They relocated to a shared 7,000 square-foot floor at 90 Washington Street.

Staffs, budgets and program commitments continued to grow. In 1999, they expanded to 17,000 square feet on the 10th floor of 39 Broadway. At the time, it was thought that this space would be adequate for future expansion, and that a portion of it could be sublet until it would be needed, if ever. It might have been seen as an omen that, by the time the surplus space could be sublet, it was surplus no longer. After a few more years, bursting at the seams, FoodChange leased an additional 4,000 square feet on the 9th floor to ease the pressure.

By May 2004, CRE’s client list had grown to over 400 non-profits, ranging in size from small neighborhood associations to major foundations and institutions. FoodChange had grown its original programs far beyond anything previously anticipated, and added such new ones as nutrition education and financial empowerment. The two-floor arrangement had been found burdensome, and neither organization had enough space. 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 non-profit community.

At the time, there were almost 8 years left on the 10th floor lease, and 4 years left on the 9th 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 9th floor. Clearly, the relocation program would need the cooperation of the existing landlord.

Isaacs contacted Tom Hettler of The Lawrence Group, the building’s leasing agent, and proposed that CRE lease space in the landlord’s portfolio that was currently vacant, and that the landlord, in turn, grant the necessary releases. The program was agreed to relatively quickly, in principle, but the negotiation of the actual lease was another story.

One of CRE’s incentives to make the move was that it needed, in addition to adequate space for existing staff, even more space for new programs. It could not, however, pay more rent than it was already paying. It also required that the landlord build out the new space to exacting specifications, including a state-of-the-art conference, training and translation center, and absorb all, or nearly all, of the cost. 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, in the 10,000 square-foot 20th floor of 42 Broadway, 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.

This month, almost 18 months to the day since Isaacs was first handed the problem, with construction completed, CRE makes its move. FoodChange consolidates its operations on a single floor, with room to grow. Both organizations use their newly acquired breathing room to breathe a sigh of relief … and hope these facilities, finally, accommodate whatever new successes may lie in their future.