The Nonprofit Centers Network has released a report revealing that prices for office space in Colorado have risen considerably in the time since the recession when many nonprofits had negotiated more favorable rates.
In the Denver metro area, nonprofits are facing rental increases of at least 50% and this booming real estate market has led to budget concerns, particularly for growing nonprofits who now face the concerns of increasing space costs and needs.
The Nonprofit Centers Network has partnered with Denver Shared Spaces to provide resources for nonprofits through the development of shared spaces and nonprofit centers, but the rising cost of real estate is a major concern for nonprofits around the country.
Read the press release and download the 2014 Colorado Nonprofit Facilities Survey Report below:
Colorado’s Nonprofit Sector Faces Impending Real Estate Crisis
Nonprofit growth potential hindered by lack of affordable office space
Denver, CO -- The Colorado nonprofit sector will soon face significant increases in operating costs due to rising real estate expenses in the Denver metro area and beyond. The 2014 Colorado Nonprofit Facilities Survey Report, released in November by Denver Shared Spaces and The Nonprofit Centers Network, shows that 26% of Colorado nonprofits will renegotiate their leases in the next 12 months. With the current booming commercial real estate market, these organizations may face a $5 per square foot cost increase to retain current office space. For the average nonprofit surveyed, this could mean $15,000 per year in additional occupancy costs.
The survey showed that nonprofits leasing space are paying an average of $10.50 per square foot, and these favorable rates negotiated during the recession may no longer be available. In the Denver Metro area, current market rate for Class B space is $19 per square foot, while class C space is $15 per square foot. Renny Fagan, President and CEO of the Colorado Nonprofit Association, says , "This information is very useful for nonprofits, policy makers, and funders. The market is changing and nonprofits need information like this to stay on top of trends."
Many nonprofits may be forced to move due to rising real estate costs, and 70% of respondents indicated that their space requirements are actually increasing and they have serious concerns about their ability to grow current and future programs.
As nonprofits struggle to balance financial realities with program needs, now is the time to consider how shared space models maximize both. Colorado nonprofits and social entrepreneurs are driving the movement toward collaborative, creative workspaces that meet the needs of employees, clients and community. Organizations can reach out to local experts such as DSS and NCN to learn about opportunities to join existing shared spaces, create new centers, and access resources that will guide the process.
The 2014 Colorado Nonprofit Facilities Survey was designed to analyze the current space needs of Colorado nonprofits and capture the current size, scope, and state of nonprofit facilities in Metro Denver and throughout Colorado. This research builds on a 2001 survey conducted by the Rose Community Foundation and The Daniels Fund entitled Survey Results: Facilities Needs of Nonprofit Organizations in the Seven-County Denver Metropolitan Area.
The Nonprofit Centers Network (NCN) is a peer-sourced network of social-purpose real estate professionals in the U.S. and Canada and supports the development and ongoing operations of mission-driven shared spaces for nonprofits. NCN believes sharing facilities and services can help nonprofits be more effective and more efficient in achieving their goals. This learning community of 160 members moved its headquarters to Denver in late 2013 and currently has two local staff members with offices at the Alliance for Sustainable Colorado.
Denver Shared Spaces (DSS) is a leader in the national trend toward intentional, shared workspace. Effective shared spaces create a sense of place, extend the reach of organizations housed within them, and achieve greater impact on local communities. As an innovative collaborative dedicated to providing technical assistance and targeted support to the Denver shared space community, DSS is connecting organizations with shared space resources and advocating for a resource and policy environment that supports shared space development.
Director of National Programs
The Nonprofit Centers Network
Denver Shared Spaces