Episcopal Diocese Taps Michaels to Redevelop Churches

A major Philadelphia religious landowner is turning to the development playbook.

The Episcopal Diocese of Pennsylvania partnered with Camden-based Michaels Organization to redevelop 26 church properties across Greater Philadelphia, the Philadelphia Business Journal reported. Plans for the properties could yield more than 1,000 housing units.

The properties will be repositioned through adaptive reuse projects that could include affordable, market-rate, workforce or active adult housing. Some sites may also be converted to nonresidential uses such as offices or community facilities.

The Diocese has not publicly disclosed the properties involved. But several are in Center City, where church-owned land sits in some of Philadelphia’s most coveted residential corridors, including areas near Rittenhouse Square, Midtown Village and Washington Square West.

The initiative, dubbed the “Transformation Initiative,” stems from a roughly two-year effort by the Diocese to rethink how its real estate portfolio could support both its mission and its balance sheet. The organization oversees 136 congregations across Bucks, Chester, Delaware, Montgomery and Philadelphia counties.

Under the partnership structure, the Diocese will retain ownership of the land while Michaels acts as fee developer on most projects. In certain smaller developments, Michaels may bring in local builders. The firm will also manage properties it develops with the Diocese receiving a portion of rental income.

Milton Pratt, Michaels’ executive vice president of development, said the projects will vary widely in scale. Center City sites may yield 30 to 40 units each, while larger suburban or multi-parcel developments could reach 150 units. Some projects could involve partial redevelopments, leaving parts of existing church facilities intact.

The pipeline could start moving within the next two years. An initial group of projects may break ground in late 2026 or 2027 once feasibility studies and entitlements are completed.

The strategy reflects a broader trend of religious institutions repurposing aging buildings and underused land as congregations shrink or relocate. In Philadelphia alone, several church-to-residential conversions are already underway, including projects in Point Breeze.

— Holden Walter-Warner