The Art of Multi-Housing; Owners Spending Six, Seven Figures on Paintings, Sculpture to Outclass the Competition

Multi-Housing News
Marina Del Rey, CA - June 1, 2005

Tom Harrison didn't know a lot about contemporary art when he bought the Water Terrace apartment building here with plans to convert it into "Azzurra," an ultra-upscale condominium. But Harrison, a principal at Colony Capital LLC, did know that he wanted "a way to differentiate Azzurra from the competition and to do so not with an amenity like a bigger pool or a better gym, but with something of genuine substance that would appeal to our target demographic."

So Harrison authorized an eye-popping $1.5 million art budget for the community and hired one of the West Coast's leading art consultants, Julie Cline, to curate the collection.

The result is truly groundbreaking: A multi-housing project that will have a lineup of artists in its common areas and corridors worthy of a world-class museum.

Drawing inspiration from its location just down the beach from Venice, Calif., the collection is centered around a group of artists who were active in the area in the 1960s and '70s–many of whom are now regarded as some of the most important artists of the past 50 years, including Jasper Johns, Roy Lichtenstein, Robert Rauschenberg, David Hockney and Claes Oldenburg. Each floor is dedicated to the work of one artist; the penthouse level celebrates the king of Pop Art, Andy Warhol.

Azzurra's art budget is obviously extraordinary, but its emphasis on art is not: More and more condo developers, market-rate rental owners and even affordable housing managers are paying both more attention to–and money on–art, which is increasingly seen as a crucial part of a project's success.

Jonathan Holtzman, the CEO of Village Green Cos., believes he can explain why. "Our prospective renters today want their communities to be more visually appealing," said Holtzman. "It's an increasing trend not just in our industry, but in fashion, automobiles and [home goods]. Look at Target, and its success with inexpensive objects that have a nice design. The American consumer overall is becoming much more aesthetically aware."

In addition to this growing appreciation of fine design that is impacting American business overall, Holtzman believes a more industry-specific evolution is also driving the increasing importance of art.

"At Village Green, we see our communities starting to function much more like hotels," he said, with the company particularly looking to take its cues from boutique-style hotels which "are more emotional, more fun, more interesting" than standard ones. "Investing in art reflects that direction that we like and that we think the consumer likes also," Holtzman said.

For Richard Lamondin, president of Cornerstone Premier Communities, a division of the Cornerstone Group and a major developer of condominiums in the Sunshine State, his company has begun placing a greater focus on art not only because consumer tastes are becoming more refined, but also due to the nation's changing demographic and lifestyle patterns.

"As our developments move closer to urban settings, getting away from the beach, we find that we're seeing a greater number of buyers who are in the creative fields," Lamondin said. "That being the case, they look for projects that understand their needs and motivations. Tying art to a project in a major way leads these prospects to it and then helps it stand out in their minds."

James Fitzpatrick, executive vice president of Corum Real Estate Group, said he spent $50,000 on lobby art for the Premier Lofts in Denver because he felt the investment would really help the property stand out in a struggling market.

"Because we were coming into such a competitive market, I knew that prospects coming into the building would be shopping at many other communities as well," Fitzpatrick said. "I wanted them to have the ability to clearly differentiate our building, and I know it worked from hearing anecdotes from residents who signed a lease [expressly] because they liked the character that the building presented. So the art clearly accomplished what we wanted it to."

Quality Art: Class A, Condo Essential
For the vast majority of developers today, whether of the rental or for-sale variety, art is usually still an afterthought, something for which a few thousand dollars is allocated from the general interior-design budget.

But as condo buyers and renters-by-choice become ever-more discriminating, not committing serious time and resources to a community's art offerings could be a momentous mistake.

In Holtzman's view, an upscale property without a significant display of art is simply missing an essential ingredient: "It reminds me of a community without flowers or one where the associates who work there aren't professionally attired. It's the finishing details that distinguish one community from another. Everyone will say they have great floorplans, pricing, location. But it's the details that make a difference, and good art is a primary component of that."

Indeed, for those class A-focused owners that are ahead of the curve on this issue, art budgets are not only expanding, but discussions on the role that paintings, sculpture, photography and drawings should play in a project are now happening early and often in the planning process.

"For us, art is a very important part of the character of the community we're trying to create," said John Landrum, COO of The Related Group of Florida. "Most developers still consider art a finishing touch, but we see it as an inherent part of the development process–sometimes even before we fully conceive of a project, [the company] is thinking about the art that would go with it."

Landrum said Related spends from $50,000 to as much as $350,000 on art at individual developments.

At AvalonBay Communities Inc., one of the 25 largest owners in the country, investing in quality art is "an important part of making residents feel you care about their experience," said Fred Harris, a senior vice president who oversees the REIT's activities in the New York metro region. "It's what makes [a project] feel like an AvalonBay community, where a certain quality is expected."

At Harris' newest project, Avalon Chrystie Place, built at the intersection of Manhattan's most trendy downtown neighborhoods, Harris said he commissioned for the building's lobby a large, "really dramatic" mural–a semi-abstract, luminescent seascape. Across the East River at Avalon Riverview in Queens, Harris commissioned a similarly sizeable, completely abstract lobby mural.

Harris, who said all the art he commissions falls on either side of the mid-five-figure range, believes this is money very well spent.

"Nothing can have the impact of original art that's created onsite specially for your community," Harris said. "If you look at lobbies in New York, the ones that are most successful are those that incorporate art that give residents and guests a special feeling. And personally, I'm very happy with the way our lobbies have come together."

And while art is about beauty and joy and stimulating the senses, it's also, to some extent, clearly about ego, or at least prestige. And developers who think nothing of charging $1 million and up for condo homes had also better keep in mind that buyers at these prices want lobbies with pedigreed art–and pieces that will impress visitors.

"High-quality art speaks to the value of the building itself and makes it immediately clear to both buyers and their guests that this is a worthy place," said Adrienne Albert, who, as president of Marketing Directors, a New York-based sales specialist for upscale buildings, has been educating the owners she represents on the importance of art for more than 20 years.

"Art is a way to attach tangible value to a condo home as well as to create the proper image and differentiate it in the marketplace. I promise you it serves as an important talking point for salespeople trying to [market] your building," Albert said.

Agreed Rick Cavenaugh, the president of Fifield Cos., which has a six-figure art budget at its 100 percent-sold, $200 million condo project, The Californian on Wilshire in Los Angles, "Our purchasers are in the social strata that they already have a fine appreciation for art, and we felt it important for the living environment to mirror their already fine taste."