Finding a windfall in their walls

Demand for their downtown properties a boon for nonprofits

The Animal Rescue League of Boston is in discussions with possible buyers for its building at 10 Chandler St. in the South End. (Globe Staff Photo / Pat Greenhouse)

When the Boston Center for Adult Education voted recently to sell its Back Bay headquarters - a five-story mansion estimated at $15 million - it joined a spate of local nonprofits that have leveraged valuable downtown property to raise cash for their organizations.

With the money reaped from the sale of its building at 5 Commonwealth Ave., the center will modernize another building it owns on nearby Arlington Street and use any remaining funds for other educational efforts.

"It's a huge opportunity for us," said P.J. Blankenhorn, the center's executive director. "I mean, how many times do you actually have the money available, as a nonprofit, to renovate a building, do it well, and also come out of it with some endowment funds? It's thrilling."

Residential real estate may be going through hard times, but Boston's commercial real estate market remains strong, giving financially fragile nonprofits a chance to bolster their endowments, improve other facilities, and pour money into programming by putting their buildings on the block. The Forsyth Institute, the American Red Cross of Massachusetts Bay, the Massachusetts Bible Society, and the Women's Educational and Industrial Union have all sold property in recent years. Others, including Concord Baptist Church and the Animal Rescue League of Boston, have reached sale agreements or are in discussions with possible buyers.

Nonprofit groups that are fortunate enough to own property are rarely motivated to sell it for the sole purpose of seizing on a hot real estate market. They typically put buildings up for sale because they are facing budget crises, they want to get out of the landlord business, they want to move closer to their constituents, or their prop erties have become too outdated or expensive to operate.

And the decision to sell an iconic headquarters building can be emotionally wrenching, as was the case when the Women's Educational and Industrial Union sold its signature Boylston Street property with its gold-trimmed doorway. The building is now owned by developer Ron Druker, who bought it for $5 million, and the nonprofit, now called Crittenton Women's Union, has relocated to Government Center.

But while visions of real estate riches may not be an impetus to sell, the proceeds from a building's sale are a welcome windfall. That's especially true when the building was bought for a pittance or has been owned for so long that it carries no mortgage - as is often the case with nonprofits.

In September, for instance, the nonprofit Forsyth Institute, which does research in dental medicine and related biomedical fields, sold its 107,000-square-foot building on 1.6 acres of The Fenway for $60 million to the Museum of Fine Arts. The decision to sell was driven by Forsyth's desire to find a building in Boston where it can expand; its Fenway building was built in 1910, "so it's not optimized for research," said spokeswoman Jennifer Kelly.

But the institute clearly benefited from the robust commercial market, as evidenced by the healthy sale price.

"It was definitely a coincidence of good timing," Kelly said. "I don't think people who are selling houses right now, unfortunately, have the same benefits."

The strong market - and a continuing demand for luxury downtown condominiums - will assist Concord Baptist Church in the South End in its effort to build a church in Mattapan. Last month, Concord Baptist accepted a $3.3 million offer from N&P Associates, a Newton developer, to buy its church building on Warren Avenue, which it has owned since the 1940s. N&P plans to convert the site into condos, according to the church's senior pastor, the Rev. Conley Hughes.

Some congregation members believe the building should have sold for more. But Concord Baptist will use the sale money to construct a church on a three-acre site in Mattapan it bought in 2003. There, it will be closer to its members, who now live primarily in Dorchester, Mattapan, and Roxbury.

So while "Boston's commercial market has really done quite well in contrast to some other cities," Hughes said, capitalizing on that market was not what prompted church officials to offer the building for sale. "We decided to put our property on the market out of necessity," Hughes added, because selling the South End property "would provide us with some needed funds to help us leverage the new project."

The American Red Cross of Massachusetts Bay was also a beneficiary of sustained interest in downtown real estate. After determining its Columbus Avenue building was too large for its needs, the nonprofit sold the property for $17 million in 2005 to Boston Residential Group and moved to Cambridge.

"The sale of our building certainly afforded us the opportunity to purchase another building that fit the majority of our programs," as well as to put money into endowment and programs, said spokeswoman Valerie Navy-Daniels.

One advantage of owning valuable commercial property, she said, is "it may reap benefit that you can put back into your organization and mission."

Sacha Pfeiffer can be reached at pfeiffer@globe.com.