Best Buddies, a nonprofit group, will move its offices from this facility at 132 Adams St. in West Newton to downtown Boston. The organization, along with several other nonprofits, is taking advantage of cheaper rent to upgrade its office space.
Lower rental rates for office space may be making landlords cringe, but for several Massachusetts nonprofit organizations the bargains are providing new opportunities – many are signing lease deals for higher quality space at comparable costs.
Rebecca Galeota, a broker with Cushman & Wakefield, said that the price options are allowing nonprofits the chance to move out of the suburbs and into the city, making their offices more accessible to clients dependent on public transportation. For comparable costs, nonprofits can also increase their space and add a number of amenities, such as handicap accessibility or security measures.
For the most part, organizations are moving from Class C office space into Class B space, or switching to similar facilities in more desirable locations. There are Class A space opportunities within the reach and budget of nonprofits but most come with short-term lease options and many nonprofits don’t want to move again in just a few years, Galeota said.
Most of the nonprofits are signing direct leases and are locking in prices for five or more years. But with 2003 rental rates so low, some landlords are more hesitant to sign long-term leases extending beyond five years, Galeota said.
Best Buddies, a nonprofit group that matches developmentally disabled people with peers and provides job searching support, will be moving out of its West Newton offices in August and into space at 45 Bromfield St. in downtown Boston. The nonprofit will save about $5 per square foot and add about 600 square feet of office space for less money than it’s currently paying. It also locked into a five-year lease, avoiding the annual rent hikes at its current location, said State Director Kathleen Burns.
The new building is also handicap accessible – its current office at 132 Adams St. in West Newton doesn’t have an elevator, making it difficult for several clients to make office visits. The new space also means that Best Buddies will have its own floor, a conference room and storage space. It’s also easily accessible by public transportation.
“We’re so excited,” Burns said. “We went over yesterday; it looks great.”
The additional 600 square feet of space will also give Best Buddies room to grow. In 1999, the organization had four employees and hosted three programs; its staff has since quadrupled and now provides five different services. Burns said that the organization currently works with 54 high schools and 23 colleges. She expects that the number of partnering high schools and colleges will soon reach 70 and 50, respectively.
These days, nonprofits have options. Faced with decreasing funding streams and bare-bones budgets, cheaper rent or higher-quality space at a comparable cost gives some organizations more breathing room.
The Boston Latin School Association, another nonprofit, has been looking for new space due to the current tenant-favorable climate, although Executive Director David S. Weiner said that nothing has been finalized just yet.
“There are a lot of options over the last few months, and the options are increasing for nonprofits,” he said. “We’re limited as to what we can pay per square foot. Particularly with today’s budget crunch, the option to solidify space needs at the same, if not better cost, is important for us and a lot of our sister nonprofits.”
Galeota said that the Boston Latin School Association is looking at 101 Huntington Ave. in Boston – for comparable rent the association would consolidate the two floors it currently occupies at 41 West St. in Boston and move closer to the school, thereby making it more accessible for alumni.
“The last reason, in my mind, is critical when you have an entity that relies so heavily on its alums’ contributions,” Galeota said.
If the school does make the switch, the new office would be built out to the association’s specifications. It also has visitor parking below the building.
Space Scrutiny
While there are better lease deals out there, nonprofits are still shying away from the upscale, Class A options. Class A sublease opportunities have certainly presented themselves and, while many of them were for shorter terms, nonprofits have declined the desirable addresses for another reason.
Even with the unbelievable opportunities, there were a slew of tenants conscientious of the message they were sending to their supporters, according to Galeota. A nonprofit group ensconced in very high-end space might raise questions.
“If they’re spending other people’s money, they don’t want to warrant scrutiny or have to explain every time someone comes in that ‘actually, we got a really great deal,'” she said.
Similar questions may arise with the for-profit industries that rely on venture capital or contributions.
“It sends the message that they’re throwing money around when the reality is that they’re getting a better deal than [Class] B or C [space],” Galeota said.
That’s one of the reasons that Service Employees International Union Local 615 didn’t want Class A space. Galeota said that the union was also sensitive to the fact that its members may not feel comfortable in a Class A office building, where there’s often heightened security and less accessibility.
The search had its challenges. Janitors were on strike during the search, and because of perception difficulties the union didn’t want Class A space despite the competitive rates available. In addition, the union needed access to public transportation, a separate area for the Pension Department, a building that employed union janitors and nearby, cheap parking.
The union settled on a long-term sublease at 60 Canal St. in Boston, with 14,240 square feet at $12 per square foot less than what they were paying. Parking costs at the new location also dropped dramatically.
