Leasing to a church?
I have a commercial building, and a church is interested in the building.  It would be an 15 year absolute NNN, with the main pastor as the guarantor.  They would be responsible for all the TI's and are willing to pay for it themselves as well as the costs of returning the building to it's original form when they are done.

My concern is the pastor isn't really credit worth in his own right to pay for the rent, and I'm not really sure how I feel about evicting a Church if they don't pay.  I asked if the over arching Church would guarantee the loan, but he didn't know.

Anyone have experience renting to a church, and caveats?

TIA!
[{"id": "cdhp676", "text": "As a Broker I have rented to Churches numerous times, like any other type of tenant sometimes it goes well sometimes it does not.  You didn't mention if the building is single tenant or not.  One thing to keep in mind is that if the building is for example a multi-tenant retail building, leasing a church can affect the leaseability of the other spaces.  For example in my state their is a min. distance required from a church to get an alcohol permit, I have seen vacant restaurant spaces become very difficult to fill because no new tenant would be able to get an alcohol license.", "replies": [{"id": "cdhpghg", "text": "Thanks!  It's a single tenant in a business park of 7 buildings.  I don't know all of the tenants, but most are professionals (CPA, Lawyers, etc).\n\nWhat's the best way to judge the credit worthiness of a church?  ", "replies": [{"id": "cdhwh46", "text": "Ask them to turn over their financials.  When you lease a building it's kind of like making a loan, so it's perfectly reasonable to request similar information to what a bank would require.  Also remember church's rely on tithes, when market sours and members loose jobs or income their giving will decrease.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cdi0fn1", "text": "Another factor to consider is parking. Getting a liquor license only affects restaurants, but with parking constrictions caused by the church's patrons, all tenants are affected. It could lead to loosing other tenant's as well. \n\nOne way to assess his credit worthiness is to have the title pulled on his personal property. If there is enough net value, you may find that to be sufficient. After all, someone's credit is only as good as what you can go after...", "replies": [], "depth": 1}, {"id": "cdi6yp0", "text": "If it's a single tenant, as you said, it's probably not a bad deal if the numbers pencil. Few things to keep in mind:\n\n- Has whatever counsel/board already approved this space? One thing I've always dealt with in regards to churches is there are about a million people who have an opinion and none of those opinions are the same.\n\n- Is their use approved? Does it require a CUP or anything?\n\n- Do they have the money??! This is probably the biggest thing. Prayers don't pay rent. I'm not anti religious by any means, but many of these churches have these great vision but no money. Depending on the market, I would be hesitant if the pastor was the only person guaranteeing the deal (especially if it's a large amount per month and his credit is shaky). See if you can get a few of the affluent church members to sign on as well.\n\nGood luck! \n", "replies": [{"id": "cdiaen5", "text": "&gt; One thing I've always dealt with in regards to churches is there are about a million people who have an opinion and none of those opinions are the same.\n\nNot so much with leasing but in other real estate transactions this has often been my experience. Often, all the opinions are valid ones, there's just a lot of bureaucracy.", "replies": [], "depth": 2}], "depth": 1}, {"id": "cdik472", "text": "Thanks everyone for their suggestions.  All good stuff.  I've requested their financials and all that good stuff.\n\nI've also decided to go and sit in a few of their services to see how many people show up and what not.  So not only a Sunday service, but also some of their week night services.\n\nReal estate investing is all about doing you due diligence and reading between the lines.  :-) ", "replies": [], "depth": 1}]