News

Nov 30, 2023

Is Art the Key to Return to Office? Brookfield Properties Thinks So

Editor’s Note: This story originally appeared in On Balance, the ARTnews

Editor's Note: This story originally appeared in On Balance, the ARTnews newsletter about the art market and beyond. Sign up here to receive it every Wednesday.

Earlier this week, Brookfield, by most measures the largest real estate company in the world, unveiled its latest project, Manhattan West, in a ribbon-cutting ceremony that lacked ribbon. What it did have were two major works of public art, a sculpture by Charles Ray and a mosaic piece by Christopher Wool. After all, it's easier to clap for art than property.

No one is much in the mood to celebrate office buildings these days, in the midst of a seemingly never-ending housing crisis and return-to-office mandates, the continued resistance to which has been rough for commercial real estate, Brookfield being no exception.

In April, the company defaulted on mortgage payments totaling hundreds of millions of dollars on their office buildings around the metro areas of Washington, D.C., and Los Angeles, approximately 0.07 percent of its real estate holdings, according to the company. A study from security company Kastle estimated last September that, since the start of the pandemic, office occupancy has tanked from 95 percent to 48 percent (though notably, Brookfield's properties were not included in that measure). And then, in December, some economists suggested as much as $453 billion in real estate value could be lost if there isn't a bounce-back.

In New York, at least, Brookfield appears to have been more fortunate. In December, the New York Post reported that the One and Two Manhattan West buildings were nearly 100 and 76 percent occupied, respectively. And, on Tuesday, the company announced that it was raising $15 billion for a new real estate fund. But the company is betting that it can entice workers back to the office, not just with amenities like a landscaped terrace and a wellness center, but also with art.

Sabrina Kanner, the company's executive vice president of development, design and construction, told ARTnews that putting aside space and resources for art was a key part of the Manhattan West plan, especially in the context of return-to-office.

"Art is an important component to the public space, which is an important component to the recipe of getting employees to come back to work," Kanner said. "Pulling people into public space is an important ingredient because the more people you have there, the more successful it is, the better it feels to be there."

Art, Kanner said, belongs in a category of attractions that real estate companies predict will persuade people to visit commercial areas, along with sustainable design and amenities. When Kanner first began working on the project in the 1980s—when the land on which it and the neighboring Hudson Yards now stand was just a sprawling network of train tracks—she was in her twenties. At the time, she wondered, "Who's going to want to come here?" But now, even with the train tracks utterly transformed, office towers can feel just as inhospitable.

Fortunately for Brookfield Properties, the head of Brookfield Asset Management, its parent company, is Bruce Flatt, the husband of ARTnews Top 200 collector Lonti Ebers. It was Ebers who suggested that art adviser Jacob King come in to select the artists from whom to commission public art pieces for the Manhattan West project. King's first choices were Charles Ray and Christopher Wool, neither of whom have any public works on display in New York City and who both accepted the offer.

"At the time, we thought it was a real long shot that either of them would be interested in making work for commercial real estate development," King said during the unveiling. To his surprise, neither artist expressed any hesitancy. "It was an opportunity to give them a platform and to give something to the city of New York."

At the unveiling, Ray discussed his sculpture Adam and Eve (2023), a stainless steel work depicting an older couple, a man in suspenders and Toms shoes, and a woman sitting on a log, wearing a pantsuit that signals she is "three or four social hierarchies above" her husband, according to Ray, who said he dislikes Hudson Yards. "So freaking corporate," he said, "but I do like this, though it wasn't built then."

Manhattan West sits just across from the Moynihan Train Hall and, for that reason, the area seems to hold on to some of the aura and gravitas associated with 1950s modes of commuting and essential infrastructure, as opposed to the pure tourist honeypot of malls and Instagrammable architecture that defines major new projects in New York like the Oculus, the Highline, and, of course, Hudson Yards. Beautiful, classic, and unexpected works by artists like Ray and Wool further this sense of dignity and vitality that is missing in those other projects.

But if the commercial real estate crash doesn't reverse, well, we know a good bit of public art isn't going to halt market forces in their tracks.

Update, 6/7/2023, 4:40 p.m.: This piece was updated to include additional context around Brookfield's default, as well RTO figures.