Cathryn Coate most certainly is not a cheerleader for the commercial real estate business, describing it as “very competitive, very cutthroat, real nasty.”
Her initial impressions of the industry’s brokers? “Sort of an oily salesman,” was one way she put it in an interview last week. Another was: “Manipulative.”
So it was a stunner to many who knew her when Coate became a commercial real estate broker 14 years ago.
“I don’t think anyone could have imagined this is what she would do,” said Diane Dalto, a consultant to the arts community, which Coate was influential in getting Ed Rendell to embrace when he was mayor. “In retrospect, it seems like the perfect thing.”
Specifically, what Coate is doing is something few in commercial real estate are devoted to: serving small nonprofit organizations.
That’s not a group typically at the center of eye-popping deals for high-end office space that set the real estate world atwitter – conventionally or social-media-wise.
Quite frankly, it’s a venture Coate’s current boss wasn’t sure about when he hired her in 2009, in an economy unkind to even veteran real estate deal-makers focusing on more traditional markets.
“I thought we were taking a bit of a chance,” Doug Sayer, president and chief executive officer of Colliers International-Philadelphia, said last week. “I really did not understand the nonprofit real estate business. I do now.”
Not only that, Colliers matches every donation to a nonprofit that Coate makes. She usually contributes 5 percent to 10 percent of her commission to each organization whose deal she brokers.
“I’m sure I’m the only real estate broker with a master’s in social work,” quipped Coate, 57, a South Philadelphia Quaker and mother of three, who started her career as a social-services caseworker in Chester County.
In general, nonprofit groups are a burgeoning sector in Philadelphia, growing 40 percent between 2000 and 2009, said Sean Coghlan, a market-research analyst at Jones Lang LaSalle Americas Inc. Nonprofit groups occupy 3 percent to 4 percent of the office market in the city’s central business district, or 1.4 million to 1.8 million square feet, he said.
Coate’s target clients are nonprofit groups typically in need of 2,500 to 15,000 square feet.
The organizational structures of nonprofit groups, their funding challenges and notoriously slow decision-making tendencies, aren’t for everyone.
For Coate, it’s a world she has known since graduating from the University of Denver with a bachelor’s degree in social sciences in 1978 – and one she was determined to continue to serve when she first decided to go into real estate in 1997, after seven years as executive director of the Greater Philadelphia Cultural Alliance.
You could say her real estate career was an evolution born of necessity – her nonprofit group’s necessity. Shortly before Coate left the Cultural Alliance, the building housing it was sold, and the agency had three months to find a new home.
As Coate walked around the city looking for properties with broker Jeff Seligsohn, of Seligsohn, Soens, Hess Co. in Philadelphia, he noticed that she seemed well-known and urged her to make real estate her next career.
Her initial reaction: “Ehhhhh.”
About a year later – and after persistent nudging from Seligsohn, Coate said – she finally did.
“It was really hard at first, really hard,” recalled Coate, who at the time was one of just a few female commercial brokers in the city, a group that still remains a minority. But that wasn’t the problem.
“It really took me years and years and years to reconcile my nonprofit sensibility, where the idea is you get paid a little bit of money to be really helpful,” Coate said. “In the corporate world, you just want to make a lot of money. It’s hard to make a lot of money when you’re really focused on being helpful.”
She stayed 10 years at Seligsohn, helping create a nonprofit-services group. She would spend two years at Smith Mack Real Estate before joining Colliers in April 2009, where she is a senior vice president – and has a loyal client following because of her unique perspective, gained from having run a nonprofit organization and advocating for many others.
“She understands how we can be working on limited budgets or how space helps a nonprofit succeed in executing their mission,” said Gretjen Clausing, executive director of PhillyCAM, a public-access-television nonprofit group with an annual budget of $750,000.
PhillyCAM moved into a storefront last month at Seventh and Ranstead Streets. Coate negotiated the lease price down to $19.50 a square foot, in an Old City neighborhood where, she said, retail space goes for as much as $40 a square foot.
She considers enlightened landlords critical to helping nonprofit groups meet their office needs. She spends time educating them about the peculiarities of the groups – for example, that the decision-makers are usually a board of directors rather than a single executive, meaning consensus on a lease can often take longer than it would with a for-profit company.
What she also stresses is that nonprofit organizations are worth the “risk,” because most are reliable tenants who often stay put.