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When investing in art bolsters a real estate project

How industry pros in the know add value with their collections

Art Adds Value to Real Estate

When top names from the real estate world flocked to art world events like last year’s Miami’s Art Week, it wasn’t just brokers hoping to rub elbows with potential clients from the 1 percent of the 1 percent or developers fashioning themselves as elite tastemakers seeing and being seen by other such trendsetters.

Rather, the presence of developers like Michael Shvo and Craig Robins, who held events, and of big residential brokers walking the galleries, showed how much insiders in both the art and real estate industries value the intersection of their worlds. 

“People really live and breathe luxury for projects, [and] it’s part of their life as well,” Emily Santangelo, a fine art dealer and consultant who helps both individuals and real estate developers curate their collections, said. 

This alignment isn’t exactly new. Real estate development is at its core putting up walls, and walls need adornment. Various Sotheby’s and Christie’s real estate franchises have long leaned on their art world names to help distinguish themselves to agents and buyers. Even New York City’s High Line, the walking path on former train tracks in Chelsea and Midtown, has mixed art installations into its plantings, adding value to the luxury condominiums that surround it. (Santangelo commissioned and installed “Urban Rattle,” the one permanent piece on the High Line, for Toll Brothers.)

Art Adds Value to Real Estate
“Urban Rattle” a sculptural art work along New York City’s Highline by American painter and sculptor Charlie Hewitt. The High Line is a 1-mile New York City linear park built on a 1.45-mile section of a disused New York Central Railroad spur, on the West Side. (Photo by ANDREW HOLBROOKE/Corbis via Getty Images)

But as real estate’s art lovers bring their hobby into their businesses, new patterns are emerging, with developers collecting more than ever, both at home and for work.

For many high-end buyers, turning a house into a home means adding art — but not just for the décor.

“I have private clients where the art within their home is worth 10 times the value of their property,” Santangelo said. 

Many such collectors are real estate industry titans. There is the infamous Macklowe art collection, the newly accessible Soloviev collection and Miami’s Pérez Art Museum, after developer Jorge. Real estate moguls pack the boards at New York’s finest institutions; the Metropolitan Museum of Art’s Met Real Estate Council Benefit is the event of the season. Aby Rosen and Bruce Eichner are other major developers who are also serious art lovers, Santangelo said.

NEW YORK, NEW YORK – NOVEMBER 05: An art handler holds Frida Kahlo’s final self-portrait “Diego y yo” while on display during a press preview of The Macklowe Collection at Sotheby’s on November 05, 2021 in New York City. The Macklowe Collection contains 35 lots with an estimated value of 400 million dollars and is the most significant collection of modern & contemporary art to appear together in auction. The Modern Evening Auction, will be held on November 16, 2021. (Photo by Alexi Rosenfeld/Getty Images)

From her perspective, the personal collectors are primed to be excellent art clients, more amenable to spending on something amazing for their projects. 

For a recent engagement with one apparent art-appreciating developer in Boston, Santangelo oversaw the installation of a giant wall of Slinkys — the toy — by artist Tara Donovan for a life sciences project from Greystar. 

Art dealer Emily Santangelo (left) and artist Tara Donovan (right) with the installation in the new lab building 74M, being constructed at 74 Middlesex Avenue. The untitled piece is made from Slinkys

In general, longtime clients understand the value of what they’re buying, she said. But it’s not always easy to get the pencil pushers to agree. 

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Clients are sometimes unsure of the budget. “Do we need to spend $100,000 on that wall?” they have asked her, “or are we okay to spend $50,000?”

But over time she noted that even skeptical developers have grown their line items for art. Equity Residential, an early client, kept upping its budget from project to project. 

“They realized, the better the quality, the faster the lease-up,” she said. “When you talk about lifestyle – if I choose to rent or own in a building, I want to walk through that threshold, and I want it to be representative of who I am.”

Can’t paint over it

Before art in new developments was as cool as it is today, HFZ Capital principal Ziel Feldman planned a permanent gallery at the XI, commissioned a “trippy” gallery show from artist Es Devlin and Bjarke Ingels based on the towers, and filled the firm’s offices with unique pieces.

Art Adds Value to Real Estate
22 October 2018, US, New York: The installation “Egg” by designer Es Devlin can be seen in the XI Gallery. “Egg” depicts New York as an egg-shaped ellipse. The Manhattan model is ten metres wide. A horizontal mirror wall reflects the model and lets the metropolis appear as an organic, symmetrical form. (to dpa “Bent metropolis: model shows New York as egg” from 23.10.2018) Photo: Johannes Schmitt-Tegge/dpa (Photo by Johannes Schmitt-Tegge/picture alliance via Getty Images)

“That was instrumental in showing who they are and, when they would have investors come in, it was impressive. Very much the way Deutsche Bank, UBS, Bank of America, they all have impressive collections in their office,” Santangelo said. 

For a developer like HFZ, whose high-end projects required that the firm’s principals be seen as purveyors of luxury, that reputation could have been priceless.

The firm then fell apart, with Nir Meir ending up at Rikers Island — art can’t paper over poor management or misdeeds. 

But the cultural cachet that comes with an amazing private collection, or even a well-curated art program in a condo, is powerful. With enough perseverance and cash almost anyone can snag a good restaurant reservation or buy a flashy watch. Knowing your Rothkos from your Miros signals to potential clients, lenders or partners that you have a higher tier of luxury expertise.   

Santangelo believes anyone in the real estate industry can build up this knowledge base. 

Those looking to break into the collecting world can start small, looking for “selections that will be timeless, not of the moment.” 

“Don’t buy art on a cruise,” she warned.

It can be harder than it seems to pick today what’s going to be timeless and what’s tacky. But of course, you can always do exactly what anyone in the industry would recommend – get a good broker. 

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