The following article was featured in Colorado Real Estate Journals’ May 17th, 2017 issue and was written by Jill Jamieson-Nichols.
Professionals team up to give back through real estate
A group of Denver commercial real estate professionals has created a one-of-a-kind organization to give back to the community through real estate. Sharing Connexion Inc. is working to match commercial real estate with nonprofits that need space, at the same time building a fund to provide homeless/affordable housing. Founded by Ed Anderson of Connexion Asset Group, Sharing Connexion Inc. involves some of Denver’s most recognized commercial real estate leaders – John Shaw, Jeff Hawks, Marshall Burton, Doug Bakke, Al Colussy, Mark Levine and many others. “I’ve always wanted to have a program for helping with homelessness, and I kept saying, ‘After the next deal,’” said Anderson. “Finally, after we sold Denver West (Office Park in 2014), I allocated $500,000 of my profits to fund SCI.”
In the beginning, SCI aimed to help nonprofits, which frequently don’t have real estate expertise, with their facility needs. For example, it recently assisted Bud’s Warehouse, which repurposes home improvement supplies and provides on-the-job training for people rebuilding their lives following homelessness, addiction and incarceration. Sharing Connexion helped Bud’s, which was losing the space it leased, acquire a former big-box store in Aurora, where it expanded. Mile High Ministries leases a portion of the building. SCI also is helping Boulder based Ready to Work, which is seeking a residential/services facility in Aurora for formerly homeless people and those on the brink of homelessness. SCI doesn’t charge for the real estate services it provides.
As SCI evolved, it recognized there are universities and other institutions that often turn down donations of real estate because they don’t have the time and resources to deal with them. “We began to look at a win-win where a university or an institution that would otherwise turn down a real estate donation would give it to us, and we would use our expertise to repurpose it and maximize the value,” Anderson said. Upon sale of the asset, SCI would keep 10 percent of the proceeds for an endowment to assist with housing the homeless, and the intended recipient of the real estate donation would retain the other 90 percent.
Because people donating real estate to their alma mater, for instance, don’t want nonprofits to sell the real estate for two years, for tax reasons, the model further evolved that SCI would repurpose and hold the real estate for use by nonprofits in the interim. SCI since has identified some 60 nonprofits that can use anything from retail buildings to warehouse to land so that now it can help institutions accept real estate donations, improve the properties and make them available to other nonprofits for at least two years.
“Our goal was to be able to have a well-established program of what we would do with the real estate if they did give it to us, rather than saying, ‘We’ll figure it out,’” said Anderson. “We are now at that position.” The 10 percent of sale proceeds that SCI keeps will go toward housing for the homeless/affordable housing. “I could certainly see us having several hundred or a thousand units within 10 years vs. the 3,500 I’ve done in my for-profit world,” said Anderson, who said SCI will work with partners to operate that housing.
“There are not a lot of people out there who are saying, ‘Give us your real estate you don’t need or that you’re willing to contribute to something like this and we’ll put it to use for societal good,’” said Ray Stranske of RaiseHomes LLC, who, along with his wife, founded Hope Communities. In fact, SCI isn’t aware of any organization in the country that provides such services.
“We see it as a quadruple win,” said Anderson, noting it allows people to donate real estate that they don’t know what to do with to a cause; it enables institutions to benefit from donations they otherwise might not accept; it helps nonprofits using the real estate; and it adds affordable housing for the community.
“We’re not trying to compete with people who do things well. We’re really trying to figure out ways to fill some gaps that haven’t been met and to take advantage of opportunities that people otherwise can’t take advantage of and really come in as partners to assist to make deals happen. It’s unique,”said Jim Mellor of Pinkard Construction.
According to Fred Baker of BakerSmith Commercial Real Estate Services and secretary of SCI’s board, the process could mean significant dollars for institutions that may otherwise turn away donated real estate, which typically would be real estate with issues that SCI would need to address. In some cases, it also could be more beneficial, taxwise, for wealthy individual to donate commercial real estate than it would be to sell it outright and donate the proceeds.
Sharing Connexion is finalizing a partnership with the city and county of Denver’s Housing and Opportunities for People Everywhere program, aimed at increasing the availability of affordable housing.
“The really cool part of what Ed has put together here is that the future is yet to be written on where we can make the biggest difference here in Denver and the Front Range. Certainly, partnerships with other organizations are a big part of that,”said Mellor.