I have become an expert in having my nonprofit clients be rejected by landlords, and this is not a particularly satisfying expertise! Luckily, it doesn’t happen too often. I have, however, also had the positive experience of having many landlords explicitly ask me to bring them more nonprofit tenants. So why have I had these bipolar experiences?
Some landlord reasons for rejecting a nonprofit client are strange, and some reveal interesting preconceived notions about nonprofits themselves. Fore example, we represented a rape crisis center several years ago for whom we located a Class B suburban building that we thought would be perfect for them. The client’s executive director and I met with the landlord and explained that the center wanted to be very low key, with no signage and a location in a quiet part of the building, as the women coming to the nonprofit wanted to be as anonymous as possible. The landlord decided that our client was not a fit for the building because they did not want “that type of person” coming into their building. Despite our pointing out that our client was treating the victims of rape, not the perpetrators, the landlord would not budge.
Of course, a commercial landlord has the right to reject any potential tenant. Our human service clients cover an extensive array of issues in our society: mental illness, HIV/AIDS, domestic violence, physical impairments, housing, child care, medical treatment for low-income children and adults, substance abuse, and more. A landlord’s concern about these clients is perfectly understandable; they don’t want a tenant who could be disruptive to their other tenants. However, we have found that our clients work very hard with their landlords to make sure that their tenancy is positive for the building.
One of my favorite examples is a client that treats people who have been convicted of domestic violence. As you can imagine, not too many landlords wanted this type of tenant in their building. Luckily, we found one brave landlord who decided to lease to our client. Our client has remained a tenant in that building for more than 15 years—and without any problems. To the casual observer, there is no way to know the background of the people visiting their office. In turn, the client has been an undemanding and extremely stable tenant who pays rent on time.
Another positive example is a landlord in far East Dallas with a large retail development. This particular landlord has leased space to a wide variety of nonprofit agencies that cover issues such as unemployment, housing, healthcare for women and children, access to food pantries, substance abuse, and the teaching of English to non-native speakers. This landlord has found that the mix of nonprofit agencies with retail tenants has worked very well. The center is 100 percent leased, while others in the area are experiencing high vacancy rates.
Although I know I will continue to have landlords reject my nonprofit clients, I rejoice in the ones who are open to accepting a different sort of tenant. I am confident that those landlords will find their willingness to lease to our clients a wise business decision, and one that is greatly appreciated by tenants who provide much needed social services.
Eliza Solender is president of Solender/Hall Inc., a commercial real estate and consulting firm. Contact her at firstname.lastname@example.org.
This article was originally posted in DMagazine Commercial Real Estate