Brokerages for the Archdiocese of Baltimore are currently working to sell the first five properties on a list of 38 surplussed Catholic parishes. The real estate specialty of selling shuttered churches, however, is far bigger than the selloff of Catholic properties and analysts say that niche practice is about to get much larger.
“We have entered what I refer to as the post-religious era,” said Stephen Ferrandi, co-founder of real estate brokerage PraiseBuildings.
The number of Americans who attend church regularly has dropped from 42 percent two decades ago to 30 percent today, according to Gallup polling.
In addition, where Americans attend church has profoundly changed.
In cities like Baltimore, earlier waves of immigrants established ethnic churches in ethnic neighborhoods as a way of preserving their culture and holding services in their first language. But as individuals intermarried, became fluent in English and moved to the suburbs, the need for and viability of those churches dropped.
Those trends now seem poised to trigger a “tsunami of church closings,” according to Richard Reinhard, Principal Consultant with Niagara Consulting Group and an acclaimed thought leader in the changing nature of community development.
According to Reinhard’s analysis, up to 100,000 houses of worship — one quarter of the religious properties in the U.S. — will close in the next two decades.
Those closures would put a lot of real estate — often located in city centers or established neighborhoods — back on the market. Analysis by the Center for Geospatial Solutions concluded that religious organizations own about 2.6 million acres in the U.S.
PraiseBuildings has been brokering that growing wave of selloffs for years. The Ellicott City-based company, which is the broker for two of the Catholic churches currently on the market (St. Rose of Lima and St. Gregory the Great), serves a variety of Christian and Jewish clients. Its largest client for more than a dozen years has been the Baltimore-Washington Conference of the United Methodist Church, which has been closing 13 churches per year on average, Ferrandi said.
Most churches are sold to other ethnic religious groups, he said. “I might sell a closed Lutheran Church to Burmese Baptists.”
PraiseBuildings has sold multiple properties to Burmese congregations and to Christ Apostolic Church, a denomination rooted in Nigeria with numerous U.S. parishes that serve migrants from multiple African nations.
The occasional shuttered church, however, is adapted to an entirely different use.
PraiseBuildings brokered the sale of St. John’s Episcopal Church in Mount Washington to Blue Ocean Development, who resold the property to Warschawski Marketing and PR. Warschawski converted the building into a stunning headquarters that blended the original high ceilings, arches, exposed rafters, windows, and hardwood with bright, modern office design.
At the intersection of Washington and Ashland avenues, PraiseBuildings sold a Baptist Church to Johns Hopkins University, which razed the structure and erected a new office building on site.
“We’re currently negotiating a contract for Mount Vernon Place United Methodist to a non-profit community group that was set up by philanthropists and folks in the neighborhood,” Ferrandi said.
The potential sale is complex and uncommon, he said, but could see the historic church put to multiple uses, including a daycare center, Peabody concerts and a limited lease-back to the Methodist congregation.
“If I am selling a church in downtown DC, the underlying real estate, the land, is worth more than what a typical church will pay for that property,” Ferrandi said. “So, it most likely gets sold to a developer for some type of redevelopment.”
For example, DC’s Ninth Street Christian Church was converted into 30 market-rate condominiums after a major renovation.
Those repurposing projects, however, are difficult, Ferrandi said.
The cost of demolition is often too high to make a repurposing project viable. Due to their shape, age, limited utilities and maintenance issues, many older churches cannot be easily transformed into offices or residential units. And the absence of parking at many older, neighborhood churches complicates prospective new uses.