Non-Profits and the Real Estate Industry
Non-profit organizations and the real estate industry represent polar opposites when it comes to their respective missions. Non-profits seek to serve a public good, while the real estate industry exists to provide housing products and services for a profit. The former provides services to meet social needs that may not easily be quantifiable, while the latter is ultimately concerned only with the quantity of money left over for those who own the company after expenses are paid -- the proverbial bottom line.
There is a public perception that among the least ethical occupations after one acknowledges lawyers, politicians, and used car salespeople, are realtors. Non-profit organizations can be seen in this light as Daniel in the lion's den, do-gooders trying to swim in shark-infested waters.
But while there may some truth to the analogy when it comes to small community-based charities who are barely able to survive from donations, grants, and government programs, the fact is that non-profit organizations such as hospitals, retirement funds, nursing homes, labor unions, political organizations, universities, foundations, religious organizations, and museums and their ilk are often major financial players with endowments in the billions and enormous real estate holdings.
This paper will focus on the trends and relationships between not-for-profit organizations and the real estate industry in Los Angeles, with reference to their relevance elsewhere.
The notion of non-profit organizations being competitive in the real estate industry needs to be critically examined before we can answer the question of what kind of relationship exists these two entities. Non-profit organizations in a sense do not compete with other players in the real estate market any more than any other prospective private purchaser, whether individual or corporate. If they have the money they buy what they want.