Inside the inefficient market for religious real estate that confounds creative reuse

A TRD editor went on a yearlong search for sacred space

Clockwise from left: The Angel Orensanz Center, the interior of the Eldridge Street Synagogue, St. Augustine’s Chapel and the Fort Tryon Jewish Center (Photo-illustration by Kevin Rebong/The Real Deal; Google Maps, Getty Images)
Clockwise from left: The Angel Orensanz Center, the interior of the Eldridge Street Synagogue, St. Augustine’s Chapel and the Fort Tryon Jewish Center (Photo-illustration by Kevin Rebong/The Real Deal; Google Maps, Getty Images)

As a journalist, I did not expect to get into commercial real estate in 2023.

But by March, my husband and I were in the market for a permanent place for our new synagogue, the Altneu.

We had started it on the Upper East Side in 2021, and the community had expanded so fast that we needed to rent a larger hall each week. 

Where in Manhattan can you gather 500 people? As the months passed, we rented space for services and events in more than a dozen locations. We soon understood that we needed our own property.

Day after day, with broker after broker, we toured shuttered movie theaters, former private schools and the Pierre Hotel ballroom. We tried to imagine ourselves in each. Where would the Torah ark sit? Where would classes and groups meet? We sought a wide space so that men and women could sit on the same level, unlike in most Manhattan Orthodox synagogues, which build upward, adding balconies to allow for more seats in a narrow building. The congregation had a long checklist of requirements for the space, including that it was up to code for public assembly and accessible. 

“Would this work, rabbi?” one community member asked, sending us the listing for a dilapidated church. 

There were, it turned out, quite a few empty temples and churches in the neighborhood, places that had struggled with membership for years and then got finished off by Covid.

But they were rarely for sale. 

For some, tax exemptions keep carrying costs low enough to keep. At others, chaotic governance prevents decision-making, including the decision to sell. For still others, landmark designations limit redevelopment prospects. In a world where a private developer can barely pencil out a new rental building, the properties seemed not to operate in the universe of bottom lines.

Churches and temples own some of the most valuable real estate in the world, we were learning, but the complexity made their holdings essentially illiquid, even with an eager, well-financed buyer making inquiries. While the old, beautiful sanctuaries sat empty, our bustling young congregation — and we were not the only one — stayed nomadic. The paradox was tripping up our search. 

“When New York was planned, there was basically a church on every corner … [now] there are too many faith-based institutions when faith is no longer a central component of people’s day-to-day lives.”
Paul Wolf, president and CEO of Denham Wolf Real Estate Services

In New York, the new is always modifying the old. But the fact that so few former places of worship were available evoked the city’s other limitations around adaptation and reuse, like perpetual vacancies at street-level retail or unfilled office buildings only rarely converting to residences.

It is hard to nail down an exact estimate for the scope of the city’s religious real estate, but the value is well in the billions of dollars. In 2015, Trinity Church’s Hudson Square commercial real estate portfolio was worth $3.55 billion; the New York Times put its total holdings at $6 billion three years later. And that’s just one church. 

The problem has even caught Mayor Eric Adams’ attention. In his likely-to-pass rezoning proposal, City of Yes, faith-based organizations would have an easier time adding new housing on their land or converting existing structures to housing, allowing more organizations to realize their value. 

American religious life is in flux — and in New York City, I quickly learned, the difference between survival and doom lies in real estate. We wanted more than survival. By the summer, we had momentum, and we resolved we would find a space by the following Passover, before we burned out.

A different kind of real estate business

For the first time in American history, membership in houses of worship dropped below 50% in 2020, a Gallup poll found. You’d think the churches might downsize, and though hundreds have been pulled down or converted, many remain.

“When New York was planned, there was basically a church on every corner,” said Paul Wolf, president and CEO of Denham Wolf Real Estate Services, a firm that works with religious organizations. Now, “there are too many faith-based institutions when faith is no longer a central component of people’s day-to-day lives.”

Many of these buildings showcase the detailed decoration of the past, which comes with expensive maintenance costs. To make the spaces functional, organizations must invest a lot of money, especially if the buildings are landmarked. Smaller organizations lack the funds, and even groups that rekindled some interest with remote services post-2020 have found that virtual gatherings “do not translate into the same level of financial support,” Wolf said.

One path to profitability is to hold events. 

The Third Church of Christ, Scientist, on Park Avenue and the Angel Orensanz Foundation and Eldridge Street Synagogue on the Lower East Side have become largely event venues after their congregations dwindled.

Other places of worship have become landlords to groups from different faiths: On the Upper East Side, Temple Israel recently began renting space to the East Side Redeemer Church. Across the park, West End Presbyterian rents to Congregation Romemu, a nondenominational Jewish congregation. The Church of Jesus Christ of Latter-day Saints signed a lease in January for 40,000 square feet at West End Collegiate Church, and another religious group will be using the space on Fridays and Saturdays. Performing arts organizations are frequent tenants too. 

There are other possibilities: selling air rights to other developers, offering ground leases or putting up mixed-use developments, like the Tree of Life Center in Jamaica, Queens.

It’s a different kind of real estate business — not simply driven by profit, but also possibly, hopefully, by something a little loftier. “Real estate needs to be a vehicle in service to the mission,” Wolf says.

Except a knack for deals does matter. As one lawyer told me, one Manhattan rector took a leave from the pulpit to get an MBA, “because if you’re going to run a church in New York, you need business sense.” (Many turn to lay leaders instead.)

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“This is a fight for the soul of our city.”
Mayor Eric Adams on adding housing to sites owned by religious organizations

Often, the answer to sustainability is in getting religious groups out of their comfort zone “about what church really looks like,” Renato Matos, a lawyer at Capell Barnett Matalon & Schoenfeld, said. “I ask them: ‘How has that worked for you until now? Not very well, if you’re spending more of your time, energy and money trying to maintain a building and not focusing on the mission and ministry of your congregation.’” 

Redevelopment is the biggest swing.

At Mt. Pleasant Baptist Church on West 81st Street, the Landmarks Preservation Commission approved a proposal to remove and reconstruct part of the building as part of a residential conversion. The addition, the Commission found, would be modestly visible from the street and would appear as a cross gable, consistent with the massing of other historic Romanesque-style churches. It is supposed to open later this year.

The challenges are “unique,” said Courtney Clark Metakis, spokesperson for LPC, which is often the party that reviews and approves applications for upgrades that would help faith-based organizations reuse and redevelop their sites.

Building big

Last year, a Lower East Side church called St. Augustine’s Chapel, the (former) All Saints’ Free Church proposed a new 21-story building with 119 residential units to rise in place of a parish house on the back of their lot. The Commission approved the new building, and restoration work to the church will accompany its construction.

In 2018, Christian Cultural Center partnered with Gotham Organization on a massive affordable housing complex in East New York, fueled by a $170 million loan from the New York State Housing Finance Agency. The development used the vacant parking lot at the church’s Brooklyn campus to build 2,100 apartments for low- and middle-income families, as well as senior housing. With Gotham Organization’s development team and Monadnock Development, the project scored $270 million in construction financing in April.

The Church of St Luke’s in the Fields owned a whole city block in Greenwich Village but needed cash. The church decided to find a solution that would both “make money but also be a good neighbor,” its leadership told Wolf. 

With Toll Brothers, the church is now developing a 33-unit building that includes affordable housing on the site of its parking lot, as well as five townhouses, construction that should sustain the church and allow it to expand its school building. 

These individual solutions may have inspired the Adams proposal to open the door for faith-based organizations to add new housing.

“This is a fight for the soul of our city,” the mayor said.

In hell

Not every transaction ends up serving a higher purpose. A Chelsea Episcopalian church was turned into the infamous Limelight club, leading the diocese to stop selling properties, given the risk that they be used for “profane purposes.” (Many faith institutions will put a deed restriction to prevent that.)

Others sell to museums — Manhattan’s Children’s Museum bought the former Church of Christ, Scientist, at 96th Street and Central Park West for $45 million in 2018.

Unholy behavior emerges in religious real estate, and there have been quite a few cautionary tales of developers taking advantage of opportunities at communities’ expenses. “Know your partner,” Wolf warned.

At Washington Heights’ Fort Tryon Jewish Center, Rutherford Thompson agreed to renovate the synagogue in exchange for air rights and an entrance to his condo building, but when he declared default and cut off funding, the synagogue was left scrambling.

In Harlem, a developer named Moujan Vahdat paid clergy for their ailing church sites — church members and the attorney general’s office both unaware. In 2019, a historic Harlem church, St. Luke Baptist Church, sued Azimuth Development and its founder, Guido Subotovsky, claiming its deal with the developer was “wrought with fraud, misrepresentations and misconduct” and that Azimuth took advantage of the church’s “unsuspecting nature and charitable parishioners.”

In Midtown, the struggling Garment District Synagogue tried its hand at selling its space to Sharif El-Gamal with a tenet requiring that the developer add a temple at what became the Margaritaville Hotel. But the space never happened, the hotel is bankrupt and the sale money is being disputed in court.

Felt like home”

After marching through the listings — and their stories of survival and renewal — we found our synagogue on a tree-lined street in the Upper East Side’s historic district at 107 East 70th Street, on the corner of Park Avenue. 

It’s a landmarked mansion with a wide facade, a wood-paneled, chandeliered library and original woodwork and fireplaces. The Visiting Nurse Service was selling the gem, which Thomas Lamont, a partner at J.P. Morgan, built in 1922.

After months of negotiations and financing, we closed in March, exactly a year from the beginning of our journey. We had a business model: Membership, donations and venue rentals promised to pay the bills.

On the first celebratory Friday night, the room was packed with Upper East Siders.

“It felt like home right away,” one congregant told me, as we marveled at the iron windows and the blossoming trees on the street. Streets change, habits update and buildings go up and come down in New York City, I thought, but we now had something to preserve.

Chizhik-Goldschmidt joined TRD in November 2023 as an editor, focusing on commercial real estate.