Is Your Church Property Serving Its Highest and Best Use?

Author: Bo Bowden

Most of us have either owned a home or have considered buying one. When you take out a mortgage loan, you’re generally required to obtain an independent appraisal attesting to the market value of the property. Likewise, when DevCo offers a loan on church property, we may a require an independent appraisal. In commercial appraisals (for non-residential properties, like churches), a major objective in determining a final value is to ascertain what is known as the property’s “highest and best use.” In short, the appraisal seeks to answer whether all or a portion of the property might be better suited for other uses.

Our Foundation staff has a breadth of experience in real estate, as licensed brokers, general contractors and real estate lenders. Over the years we’ve also developed a network of professionals from across the Commonwealth. Sometimes it makes sense to engage professional consultants to study in-depth the use of your property. We are available to talk with you conceptually about the current use of your property and whether and how it may make sense to pursue new uses.

This is an exercise that most churches will undergo at some point in their facilities’ useful life.  Often it is driven by ever-rising maintenance costs, causing finance committees or trustees to wonder whether they can sustain support. Other times the pastoral staff and church council want to consider a new use for space whose occupancy has declined due to changes in the congregation or completion of a ministry. And it may be prompted by inquiries from third-parties, inviting a church to explore either partnering with a group outside the church, or even to sell all or a portion of its property.

We view these events as opportunities to consider several important questions:

1. Are your church’s ministries serving the people in its locale?  Many churches, particularly those in transitional areas, must necessarily revisit the demographic trends in their immediate areas. What ministry could you offer that was not necessarily a topic five or ten years ago? Is there a service opportunity not being met in your community?
2. Has the use of other buildings in your immediate area changed? If so, does this suggest a different need for a portion of your church’s property? There are many areas throughout the Virginia Conference where entirely new uses of church property are being envisioned. It may include a commercial use, which could help fund other important ministries lacking resources.
3. Does your congregation have a passion for a particular ministry that could manifest itself in new ways? We have seen new and interesting partnerships develop. Some churches have entered into agreements for part-time use of their kitchens (which can be mutually beneficial if the non-church partner contributes to necessary improvements), or to offer spaces for overnight accommodations of traveling Methodists or the homeless. Unused office space can be a great option for area not-for-profits who cannot afford market rent.

We’re always available for conversation as you contemplate future plans for your church’s property, and would like to help you envision how to achieve its highest and best use!