Landlords Are Turning Offices Into Art Galleries To Win Tenants

Two years ago, Merrick Porchéddu shifted her consulting business away from the public sector to focus on where artists are getting paid: corporate workplaces.

In efforts to bring back tenants following the pandemic, office landlords are investing tens of millions of dollars in office renovations. Slapping a generic print in a craft store frame and hanging it on a conference room wall is no longer enough — the space has to be exciting. For some, it has to be exclusive. 

Budgets for commissions commonly range from $200K on the low end and into the millions, according to Porchéddu, the founding partner of Artist Uprising. 

“Sometimes what we pay artists blows my mind,” Porchéddu said.

Earlier this year, at One Liberty Plaza in Manhattan, Brookfield Properties unveiled a 1,024 SF light installation that visitors can interact with like a virtual game of ping pong. The piece by Pierre Huygh, called A::Light, cost approximately $1M of the $40M lobby overhaul’s budget.

Such large works of art can be a heavy lift — and not just for the handlers — requiring electrical wiring or space that is atypical for an office building. But consultants say they are increasingly being given more time and larger budgets to create an enticing environment for tenants. 

“Back in the day, it was really more art as decoration, making sure that spaces didn't feel empty,” Art + Artisans founder and CEO Jennifer Brener Seay said. “There's been this huge shift to quality and people taking less space but making the space that they do have be more extraordinary.”

A study of 2,000 office workers found that employees are 17% more productive in enriched environments, which include plants and imagery, than those in minimalist spaces, according to a 2024 report by Corgan—Hugo. Researchers have also found that artwork can lower blood pressure and heart rate, with increased benefits when there is greater immersion, such as when visuals are paired with music.

Another recent survey of 1,000 employees, conducted by Brookfield and independent research agency Perspectus Global, found that many companies are in a “disengagement crisis.” Only 24% of workers feel inspired by their job. For those working in so-called enriched offices, the percentage rose to 39%.

Evidence of returns on investment comes in leasing figures. New buildings and those that have undergone significant renovations since the pandemic have continued to outpace the rest of the market. Nationally, the overall office vacancy rate is 18.6%, while prime buildings are only 12.7% vacant, according to CBRE.

JPMorgan Chase’s new Park Avenue headquarters, which opened in October, has marquee artists incorporated into its architecture. The 1,388-foot-tall building is clad in a light installation by Leo Villareal, and its base was crafted by Maya Lin. Pace Gallery has sold pieces from its dual presentation of the two artists in the range of $100K to $200K per work.

In the building’s lobby are two grand-scale paintings by Gerhard Richter — whose work has sold at auction for as much as $38M — and a flag sculpture by architect Norman Foster. The elevator banks include a motion display by Refik Anadol.

“Sometimes those pieces of art can be pretty large investments, but when you amortize it over 30, 40 years of ownership and reinvestment into your buildings, it's much more palatable,” Related Ross Vice President of Development Mac Fillet said. “It's a line in our early budgeting process, and we hold that number there all the way through the end.”

As part of Related Ross’ $120M transformation of the Phillips Point office tower in West Palm Beach, Florida, the firm is investing $1M in the waterfront Trinity Park adjacent to the complex. There, the firm will unveil Half Big Suit, a sculpture by Austrian artist Erwin Wurm. Other comparable, but much smaller, versions have sold at auction for $40K. 

At One Flagler, also in West Palm Beach, Related Ross commissioned Fred Eversley to create his largest-ever sculptural installation with Portals. His work had previously been valued at as much as $180K.

For others, showcases are subtler. In his $50M upgrade of 9 W. 57th St., owner Stefan Soloviev added an art gallery showcasing his family’s personal art collection, valued at hundreds of millions of dollars, with works by Pablo Picasso and Henri Matisse.

The additions helped bring the building’s occupancy over 91% and led to a $1.8B refinancing, through which Soloviev pocketed a more than $500M dividend.

As part of the $45M repositioning of 10 Grand Central in Manhattan, Marx Realty tapped into the building’s art deco history for inspiration. The amenities floor is reminiscent of a 1930s luxury train car, decorated with a pair of 52-by-76-inch oil paintings by Rachel Hearn and sculptures by Sanne Terweij, who showcases the way that metals oxidize in her work.

“Many of our tenants have similar art collections in their homes, so it really speaks to them when they see it in their office building,” Marx President and CEO Craig Deitelzweig said. “It makes them feel like this is their home away from home.”

Marx launched a similar $41M renovation at The Herald in D.C. after it acquired the property in 2020. It commissioned art inspired by Jackie Kennedy, who worked as a reporter for the Washington Times-Herald, which previously occupied the building.

Art isn’t just a way to lure the more sophisticated tenants in. It is also a necessity for companies with younger employees and clients. 

Spotify was ready to walk away from Silverstein Properties’ 4 World Trade Center in Manhattan when it first toured the space. Executives thought a converted warehouse would better fit their brand than a massive steel tower — until they visited the 69th floor, Silverstein Chief Marketing Officer Dara McQuillan said. 

Developer Larry Silverstein has a long history of working with artists, including donating office space to be used as studios. He had invited 60 graffiti artists to use the floor as a canvas. The display convinced Spotify to ink a $566M lease as the building’s anchor tenant. 

Silverstein used the same strategy as a way for firms like Uber and McKinsey & Co. to entice young employees who were hesitant to return to the office after the coronavirus outbreak.

“The pandemic hit, and suddenly all of these companies were struggling with getting their employees to come back to the office,” McQuillan said. “A lot of the artists that we had offered free studio space to within the building, they were able to continue painting during the pandemic. They were hired by some of those companies to come in and paint their common areas, their receptions, their kitchen and their cafeterias.”

For companies that want to appeal to Generation Z, the artwork is intended to create a sense of “FOMO,” said Seay, who curated art for TikTok’s office in Austin.

“These developers or companies that have 1,000 or 2,000 employees are using their artwork as a means of bringing people together that maybe normally wouldn't talk to each other because they work on different floors or they're with different companies,” Seay said. “When you have some really cool artwork in a great amenity space, it invites people to come and hang out and be part of the community of this building.”

At the Teachers Insurance and Annuity Association of America's headquarters in Frisco, Texas, Seay’s firm worked with Corgan to bring more than 170 new pieces of art to the 15-story building. The project prioritized sustainability and community. 

“I think about just how much more visible our workspaces are now through social media, how that influences what we expect of those spaces,” said Aralyn Griesbach, Corgan’s in-house art coordinator.

Real estate executives have long been players in the art world, amassing large private collections. That means that they may approach art budgets differently compared to corporations that must justify their spending to shareholders each quarter.

Porchéddu said developers who are art collectors themselves are among the most fun to work with. 

When working with IBM to curate art for its New York City office, executives requested an estimate for a custom piece from a particular blue-chip name. A single installation would have cost $2M. 

“That's usually where the corporate clients will back up,” Porchéddu said. 

But when a project in Dallas didn’t have the budget to support a big-name artist, the developer, an art collector himself, stepped in.

“I found it to be extremely successful, because the budget comes from somewhere else and it comes with a lot of love,” Porchéddu said. 

RFR’s Aby Rosen has been ranked among the world’s top art collectors. In 2019, speaking about his residential buildings, he told The New York Times that he “would love to be recognized as a developer who creates spaces that are really geared for an art collector.”

The same sentiment goes for his commercial portfolio. Under his ownership, the Park Avenue office tower Lever House’s lobby was transformed into a gallery, featuring artists like Andy Warhol and Isamu Noguchi. 

Across the street, in the Seagram Building, several works by Jeff Koons adorn the lobby and elevator bank. RFR refinanced that tower, which is nearly full, for $1.2B last year.

“I always scratch my head when you have insignificant or not beautiful art in some of these lobbies, and they're still trying to get 200 to 300 bucks a foot upstairs,” RFR principal Charlie Rosen said. “I don't think you're giving your tenants something to be proud of, and you're handicapping yourself, quite honestly.”