S.E.C. Real Estate Observer

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Most real estate professionals naturally gravitate to and focus on the “numbers.” What is the cash flow…how can we increase the rental rate… are the Common Area costs being charged to the tenants…how can we reduce expenses so as to increase the “bottom line”? All numbers, oriented, practical, levelheaded issues to be addressed. And indeed, that view is needed and useful and valuable.

But it is also useful to look at real estate with another eye… the eye of the artist or the designer.

The real estate properties that have endured as a source of value have over the years included that “special quality” of the artist’s or architect’s touch. The Empire State Building in New York City, the Transamerica Insurance Building in San Francisco, the Sears Tower in Chicago, have all endured and succeeded by imprinting a unique and powerful visual image.

In Austin, Texas, a run-down apartment building had stood semi-vacant and in disrepair for years. While there were plenty of university students in the area, even they were not interested in living in this property. A creative entrepreneur saw the apartment project as a “creative opportunity” … a canvas for his imagination.

On the exterior, where there was damaged brick, he put old motorcycles hanging off the side of the building, water tanks on the roof, and other “wacky” design touches. On the inside of the apartments he tore out the carpet and stained the carpet floors. Where there were holes in the wall, he put up sheet metal. All in an intentional program of creating a unique product in the marketplace, rather than another plain vanilla remodel.

The result was that that the property filled with students who saw the apartment as something special, what another generation might have called “hip” or “cool.”

Recently, I have been engaged in a new way with “Real Estate as Art.” Steve Barker, S.E.C. brought this possibility to my attention. In planning how to remodel a hotel in North Dakota, Steve brought in an architect, three designers, and a marketing expert. At first, all I could think of was “how much is this going to cost?” But as the brainstorming and ideas unfolded, what became apparent was how the property COULD look and how it COULD function. In the process, a “Visual Mosaic” began to arise in the conversations we had. The designers even undertook the creation of an actual mosaic on the walls of the hotel lobby, utilizing the colors and textures of the western North Dakota territories.

And as the mosaic unfolded, the local townspeople began to talk. “Did you see what they’re doing at that hotel? What’s going on? What are they going to do next?” It was the “visual” stimulus they were responding to…creating “buzz” in the community about the project.

Now “art” must be managed, every bit as much as a budget. “Dream to the sky, but engineer back to earth.” Costs must be weighed … practical decisions made…contracts negotiated. In the end, however, what is possible is the marriage of two dynamic forces in society today – Real Estate as a source of value AND Art as the source of inspiration! That marriage has the possibility of creating a profit center unique in the marketplace.