Strong demand for property among religious groups

By: Bernadette Starzee - Long Island Business News  May 28, 2014 

Steve Ross occasionally dabbles in transactions of a spiritual nature.

The proprietor of Ross Realty Group in Syosset lists religious properties among his commercial real estate specialties and recently worked on the contracted sale of a synagogue in Old Bethpage that will be converted to a church.

Doing God’s realty work is a time-consuming process, which Ross said limits the number of brokers that become involved in this subset of the commercial real estate industry.

Sales of religious property must be approved by the New York State Attorney General’s Office and signed off on by a justice of the Supreme Court in the county where the property is located.

“This can add up to six months of time to the transaction, once all the paperwork is completed,” Ross said, noting the paperwork itself is extensive.

According to John Breslin Jr., an attorney whose law practice and appraisal company, Breslin Appraisal Co., are based in Huntington, the attorney general’s office requires two appraisals of religious properties and will scrutinize the reason for the sale and how the proceeds will be used.

“The office looks at where the money is going – whether it will be put to religious use,” Breslin said.

For instance, when a church becomes defunct, the money from the sale can’t go into the reverend’s pocket.

In the case of the Old Bethpage synagogue, the property was vacated last year by Temple Beth Elohim, which, citing a decline in enrollment and changing demographics in the area, merged with the North Shore Synagogue in Syosset. Ross, who entered into a brokerage agreement to sell the property last June, expects the sale to close by the end of this year.

Buyer demand for religious properties is strong, according to Ross, who noted growing interest in acquisitions among various Christian, Buddhist, Hindu and Islamic organizations.

Small Christian congregations have been growing in recent years, noted Gary Smith, a Hauppauge attorney who has worked on religious property sales and acquisitions throughout the New York area, including Nassau and Suffolk. The trend is being fueled in part by an exodus of Latinos from the Catholic Church, with many joining evangelical congregations. According to a recent Pew Research Center study, 55 percent of Latino adults consider themselves Catholic, down from 67 percent four years ago.

“Smaller religious groups that start out in a house or storefront and are growing may be looking to move into a nice house of worship with more parking,” Smith said. “For a well-maintained religious property that is a going concern, there will be buyers. If you have a nice building with a sanctuary, classroom area and handicap-accessible bathrooms, a group that is prospering will be happy to move in.”

When a house of worship goes up for sale, it is marketed to other religious organizations, since it’s already designed and approved for that use, Ross said.

However, most municipalities permit religious use in a variety of commercial and residential zoning districts.

“Public policy favors religious use; it’s seen as being good for the community,” Smith said. “You can put a church just about anywhere.”

Smith has handled transactions in which other commercial property types were converted to religious use, including the historic Stanley Theater in Jersey City, which became a Jehovah’s Witnesses assembly hall.

Though in many cases statutes pave the way for properties to be converted to religious use, however, minimum parking requirements apply, and cash-strapped towns may be reluctant to take existing commercial properties off the tax rolls to make way for a religious or other tax-exempt nonprofit organization.

Prices of religious properties vary with the market, Smith said.

“It’s no different from other entities,” he said. “If the market is down, the value of the church property is down.”

Tel: 516.802.5500 / steve.ross@rossrealtygroupny.com

Syosset, New York