A Commercial Real Estate Agent’s Perspective
Recently, I was asked by a church leader who is responsible for all the land and building acquisitions as well as the dispositions of all of the church properties in the Southeast for a very recognizable and well-respected church denomination if I was seeing any new trends in the world of church real estate as a result of COVID-19?
Here, are some of my insights I shared with him from a commercial real estate agent’s perspective as of 5/27/2020.
Opening the Doors Back Up:
Churches are mixed on deciding to start services back. For example, the church I attend which is a start-up church with an average Sunday attendance of around 175 total, pre-COVID, will be starting back this coming week but no childcare or children’s ministry. Others like two of the churches I attended previously which were well attended pre-COVID with average attendances of about 800 -1000+ in total per Sunday are waiting to start back because they aren’t quite sure what to do about the children. One mega-church pastor I spoke with recently said they likely won’t be starting live services back for another month or so and despite their attendance actually increasing during COVID, online, he did not anticipate that matching in the physical once they open services back up due to many of the reasons I’ll share later in this article. I also spoke with a leader in the Korean Church who also has ministries here in the Southern US and according to him his congregation of 15,000 in South Korea has had a loss of anywhere from 30% to 50% attending their live worship services and he doesn’t foresee there ever being a time in the future that he doesn’t do video streaming of his messages.
One of the big issues are the kids. And that isn’t because they are more vulnerable to COVID, but rather because they are walking petri dishes with no social distancing comprehension whatsoever. And as a result, are the most likely to pass COVID along if they are carrying it. Honestly, this is the one that is most concerning to me. Both on a personal and professional level.
Personally, despite our church opening our doors next week my family, which includes a 9-year-old extrovert, will likely not attend services for a while until we can feel comfortable around how our church is going to manage the children post-COVID. Hard to imagine social distancing 5-year old’s.
Professionally it concerns me because almost everyone I have talked with who go to church, that have children, and who are in the spectrum of extremely to moderately concerned about COVID, which is about 2/3 of those I have talked with about this issue, are all in either the wait and see camp or a full on not going back to church until there is a cure mode. I recognize that my 66% number is not an official stat but if that number is anywhere near what the real number is of folks with kids that will likely be out of church for a while, we could be in trouble, and the future of church as an institution will likely change forever.
Then there are seniors. Who knows when they will start coming back to church again? Unless the churches they attend are large with low attendance numbers allowing for lots of social distancing, and also incorporate extreme deep cleaning prodigals, I suspect it could be quite a while before they return in droves.
Tithes and Offerings:
Interestingly enough, giving has not decreased at the same rate as attendance. A saving grace honestly for churches and their ability to service any debt they may have. One thing is for sure, those churches that had established online giving prior to COVID are faring better than those that hadn’t. I’m concerned though that as the unemployment rates continue to rise, contributions may do the opposite.
It May Never Be the Same:
Unfortunately, at this point, even if we end up learning that COVID is just a bad cold with a death rate of less than .05%, the damage has already been done.
Out of the 5 basic tenants of commercial real estate which includes land development, office, retail, industrial, and multi-family as well as special commercial uses such as senior living, and churches, it appears only the industrial market has been affected minimally. All other aspects of the commercial real estate market have been, and will likely continue to be, affected heavily in a negative way. Office, retail, senior, and churches may never fully recover to the same level they once were without significantly changing their models.
For example, many small, medium and large companies have learned during COVID that work-from-home, works, and that they don’t need as much office space to get the job done. The same goes for retailers. If shoppers didn’t know how to before, they now have become experts at online shopping, and as a result many of those shoppers will have learned a new convenient habit that will keep them home rather than in stores resulting in countless vacant retail shops and malls, even when given the opportunity to return.
What about churches? Will this hiatus from going to church form new habits for parishioners? Such as sleeping in and saving time on Sundays by not going to church as well as saving money not going out to eat afterwards, or, watching church online via Facebook or streaming, or getting together weekly with church friends on Zoom? Will this time away make them rethink the need for going to a building for “church”? Will in-home Small Groups become the sustainable church model? Will church goers have learned to become consumers and church hop virtually for the worship and/or message style they like? Will the lack of help they received from the church during this time taint their view of the need for church, pastors and gathering with friends on Sundays? Will the fear of fellow church members not initially adhering to social distancing cripple attendance recovery?
Will church attendance in church buildings ever be the same? Only time will tell, however, if the answer to that question is no, then churches and even denominations with large church buildings, with the large overhead those buildings and properties produce on a monthly and yearly basis, may find themselves in trouble. Similar to large office and retail building owners.
What to do:
What should churches be doing right now? My personal opinion is to act like any other organization during this time. Unless they have received a direct message from God, they should pray and hope for the best but plan and prepare for the worst.
What does that look like? 1) Cut Expenses: Do an audit of the books monthly and find areas to cut expenses by at least 15% including reducing salaries where possible. 2) Renegotiate: Look at all service contracts, monthly/quarterly/annually bills and see if there is any way to get them reduced. Call all vendors and shave services when and where possible. 3) Adapt/Change: Think pioneer, not homesteader. The world has changed as we know it, whether we like it or not, and the Church must be willing to change with it. This is a time to become fluid and be willing to quickly adapt and not to be stringent and affixed to old plans or the old ways of doing things. And by old, I mean even 4-month-old plans or ways. 4) Be of Service: Be the one throwing the life preserver and not the one bringing others down with you as you drown. Lead with a servant’s heart. Find ways to give in a time of need. Reach out to all your members and simply ask them how you can help. But be willing to actually help them if they ask for something. 5) Be a resource: Many times, you won’t be able to help those that need it yourselves but you’ll know someone you can recommend. If there was ever a time for you to be able to say “I know a guy”, this is it.
Now, my final thought on all of this, is that despite all of the above, I have observed in my studies of Christianity an interesting phenomenon that when Christians face persecution, famine, plague, etc., they thrive. Pressure forces us to rely on God more, to lean on Him for support, guidance and strength. It draws us closer to Him and each other. So even though the future of the institutional church could appear grim, history has taught us that the church will thrive during a time such as this. It will grow. It will succeed. It will prosper. It just might not look like it once did, and we may just have to learn to be OK with that.
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