Carmel of the Holy Family is a contemplative Catholic order for women. The Carmelite nuns operated the monastery in the affluent Cleveland Heights neighborhood of Cleveland since the early 1960s. The two-story building measures 35,000 square feet, and consists of 25 dorm-style bedrooms, a large chapel that seats 40 people, a commercial-grade kitchen, and a library.
Prompted by operational and cost considerations, the Carmelite nuns needed to sell the property and move to a smaller facility better suited to their evolving needs. The Order needed a real estate brokerage that would help them sell their unique asset on an accelerated timeline, meet their primary objective of maximizing proceeds from the sale, and deal with a few other challenges.
Carmel of the Holy Family engaged commercial real estate services firm Allegro Real Estate Brokers & Advisors to sell the property. The listing presented a number of challenges.
Shortly after Allegro listed the property for sale, Carmel of the Holy Family purchased a new facility, and the Sisters began moving their belongings to the new building. This operational decision expedited the transaction timeline, as the Sisters were concerned about sustaining the carrying costs of both buildings. Their concern was particularly related to the operating costs of the monastery, as its labor and maintenance requirements increase in the spring and summer months, which is when the property was on the market.
During the title search process, it was discovered that the regional sewer district had a permanent easement affecting approximately half an acre in the northeast corner of the property. This easement prohibits the construction of permanent and temporary buildings on the land without prior written consent. The impacted area is in a particularly valuable section of the property, and potentially hindered a buyer from developing that area of the property.
The property was zoned for single-family residential uses, which limits the potential to develop the site for other uses without a zoning variance. The City of Cleveland Heights has a “conditional use” specified in its zoning code that allows for a Planned Residential Development on a multi-acre property. Aside from this and several other specified conditional uses, any higher density or commercial project requires a variance. This effectively limited the pool of acceptable buyers, as Carmel of the Holy Family was seeking a quick close that did not require a formal zoning change to occur prior to closing.
The property was subject to an extensive examination as part of the city’s point-of-sale inspection. While the property was in great shape for its age, there was some risk involved in the inspection and ultimately who would be responsible for remediating any issues. This challenge delayed the execution of the Purchase and Sale Agreement, as the buyer and seller needed time to both get comfortable with the risk and to negotiate liability.
The monastery was home to many Sisters over its half century of operation. The building functioned as living quarters and a place of worship. It hosted a variety of community events and regularly conducted Catholic Mass ceremonies that were open to the public. As a result of these uses and the building’s longevity, there was a substantial amount of personal property accumulated in the building, as well as holy objects and religious relics, that had to be removed.
Allegro determined that this unique property required a unique marketing approach—including listing the property without an asking price. This rare approach expanded the pool of potential types of buyers, and created competition between: (1) parties interested in the existing structure, and (2) parties interested in redeveloping the land.
Allegro conducted extensive research on likely buyers, including residential property developers, educational institutions, religious institutions, small businesses, wealthy individuals, and local non-profit organizations. Allegro developed a comprehensive listing package, and marketed the property through a multi-faceted online campaign that leveraged the firm’s website, several commercial real estate databases, social media platforms, and a proprietary national email marketing system.
Allegro also deployed a proprietary blend of data analytics to identify and target potential buyers. This approach involved leveraging website/listing traffic, and examining key metrics such as number of views, time spent viewing, and viewer location.
Allegro’s unique pricing strategy and laser-focused marketing tactics generated interest from prospective buyers nationwide. Allegro conducted property tours for interested and pre-qualified prospects, and quickly received offers from four highly qualified prospects.
Allegro conducted leveraged negotiations with each prospect, secured deal terms that accomplished the client’s objectives, and closed the transaction less than 10 months after listing the property for sale.
The ultimate purchaser planned to redevelop the site into a mix of for-sale cluster homes and condominium units. The purchaser bought the property based primarily on its size, proximity to recreational parks, and the affluent residential neighborhoods nearby.
Allegro negotiated with the buyer and worked with municipal officials and other stakeholders to ensure that the proposed purchase met the needs of Carmel of the Holy Family.
For example, Allegro refused to simply accept the existence of the easement as an encroachment that negatively impacted the site’s value. Instead, Allegro worked to understand the buyer’s plans and how the easement would impact those plans. Then, rather than offering the buyer a concession of value, Allegro approached the sewer district, seeking a solution. This extra effort was rewarded with a written approval stipulating that the easement would not impact the buildable acreage, based on the purchaser’s proposed site design. This approval provided the buyer the assurance it needed to move forward with closing, and spared Allegro’s client from making any costly price concessions.
Allegro also negotiated with the purchaser and the city to ensure that the findings from the point-of-sale inspection did not cause any issues with the transaction, although they did present some challenges during negotiations.
Allegro gave special consideration to the holy objects and religious relics. These special objects required a separate sales process, which included instructions on how to dispose of the items. As part of the sale, Allegro assisted the Carmel of the Holy Family in inventorying and coordinating removal of their personal property and religious relics from the site.
Allegro was successful in closing the transaction on an expedited timeline, within 10 months of receiving the listing. Additionally, the firm was successful in maximizing the proceeds of the transaction in line with the client’s expectations.
Through strong negotiating, Allegro helped Carmel of the Holy Family avoid additional out-of-pocket expenses associated with the former monastery building.
Allegro was successful in building consensus within the client’s advisory group on topics such as pricing expectations, project timeline, and various negotiation tactics. This consensus helped the client gain comfort in Allegro and its approach.
Finally, there was an emotional component to this transaction that is not present in every commercial deal. Many of the Sisters spent decades living in the monastery. Allegro spent additional time making the process as simple and understandable as possible, while also recognizing the emotional nature of the deal and empathizing with the client’s situation.
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