Get back to work with a Propmodo membership | Use code FALL20 for 20% off →

Street Art Brings Color to Real Estate Developments, But Thorny Issues, Too

Street art didn’t always use to be so socially acceptable. For most of its history, it was considered vandalism. Not many landlords or real estate developers would welcome ‘art’ painted on the side of their buildings. But murals and street art projects have been a commercially viable art movement for a while, and they’ve evolved from the early forms of more subversive and defiant graffiti. Whereas graffiti is usually done illegally, street art is increasingly being commissioned by corporations, landlords, and real estate developers to enhance their property’s appeal. The shift is even opening up a new career avenue for artists. Street art has gone mainstream, or if you’re more of the cynical, starving-artist type, it has officially sold out.

Some people credit the ‘Kilroy Was Here’ graffiti of the World War II era as one of the earliest examples of modern graffiti and street art. It was a wildly popular meme, a simple line-drawing doodle of a long-nosed figure peering from behind a ledge. The doodle and the phrase became associated with GIs in the 1940s, and its origin is still debated. Kilroy would appear at truck stops, restaurants, and military boardrooms, though it first reportedly occurred on military docks and ships in late 1939. The bald-headed doodle became an international inside joke, scrawled by thousands of different soldiers and showing up in places like the torch of the Statue of Liberty and the Arc de Triomphe in Paris. Landlords back then probably didn’t like the joke as much as the GIs sketching it.

An example of the ‘Kilroy Was Here’ graffiti at the Washington, D.C., WWII Memorial, pictured here in September 2006.

Street art has come a long way since then. Much of what can be defined as modern street art originates from New York City’s graffiti boom, starting in the 1960s and ‘70s and peaking with full-car subway train murals in the ‘80s. But the 1980s was also when the commercial crossover started. Some street artists gained such widespread international attention for their work that they transitioned into the mainstream art world. An example is Keith Haring, who began with spontaneous murals on NYC subways and eventually produced large-scale commissioned murals and became world-renown.

A New York City subway car in May 1973 was one of the many covered in graffiti inside and out.

Public art on commercial buildings has never been more popular than today, and landlords and developers have noticed. In most cases, street art installations create a win-win for cities, residents, and landlords by engaging communities, dressing up what would otherwise be empty spaces and blank walls, and helping properties advertise themselves.

Some property owners shell out for commissioned artwork even if it doesn’t lead to direct monetary gain. That’s because buildings sometimes become known for their murals, drawing foot traffic and potential customers. The murals serve as a form of branding, and buildings can quite literally be placed on the map in terms of community mural tours and art walks. 

Street art has become a top tourist draw in many cities, and European destinations such as Berlin, London, and Paris all have popular street art tours running year-round. There are many examples of this in U.S. cities, too, including Philadelphia, which has a Mural Arts Program and more than 3,600 murals citywide. Ending up as a stop on a popular art tour can be a big win for landlords and developers.

More than meets the eye

For landlords, finding street artists to work with has become more accessible, too. Jordan Giha has worked in commercial real estate for 13 years and has always dreamed of merging his creative side with real estate. So, during the pandemic, he founded WXLLSPACE, an online platform that connects real estate developers and landlords with street artists. The platform works like listings for Airbnb, where property owners submit their proposal for a street art installation, and then artists respond on the website with their ideas. Giha explained that many artists are talented creatives but may not have the best business skills, so his platform levels the playing field. “It’s easy for artists to respond to the listings,” Giha told me. “It saves time compared to lengthier requests for proposal forms that artists would normally need to work with.”

Without a site like Giha’s, property owners usually find artists online on Instagram or through word-of-mouth. Looking for an artist that way can be more difficult, especially if landlords want to stay within their budgets. Another benefit of WXLLSPACE is that the company arranges the legal agreements, logistics, necessary insurance, and even the permits needed from the cities to do street art installations. Giha moved his company from New York City to Atlanta recently partly because stricter laws make it harder to commission street art in NYC. Atlanta also has a vast and growing street art culture.

Artist Ben Keller working on a Miami mural project curated and sponsored by WXLLSPACE. (Source: WXLLSPACE)

Giha explained there’s more that goes into commissioning a street art piece than meets the eye. Property owners need workers’ compensation policies for the artists and an umbrella insurance policy in case the artist gets hurt. All artists also need insurance policies and safety certifications for aerial lifts. Some property owners will work with art agencies and curators to find street artists, but the agencies typically charge a exhorbitant middleman introductory fee. “We are more of a liaison, and we focus on the logistical aspects, too,” Giha said. “Getting everything done is a very manual process; we do everything online and use technology to make the process more efficient.” Commissioning street art is typically a significant transaction and an uncommon one. Giha told me some commissions range between $20,000 to $50,000.

5Pointz of contention

Murals are usually good for business and can lead to surprising results. A case in point is what happened in 2008 to a gas station owner, Eytan Rosenberg, in Los Angeles. Rosenberg said he didn’t know who Banksy was when a friend asked if the world-renowned street artist could paint on his garage’s wall. The result was Banksy’s “Flower Girl,” depicting a young girl looking up at a security camera with a basket of flowers. Rosenberg later sold the gas station and painstakingly removed the painting and installed it in an aluminum frame. He then sold the Banksy piece at an auction house in Beverly Hills and fetched $209,000 for it. While there were no legal disputes in the sale, it’s easy to see how public artwork commanding such a considerable price could cause problems. Banksy didn’t object to the auctioning of “Flower Girl,” but would another, lesser-known artist do the same?

An example of a contentious legal dispute involving street art is at 5Pointz in Long Island City, Queens, New York, where a warehouse owner, Jerry Wolkoff, allowed graffiti artists to paint on his building for years. The warehouse became a graffiti mecca, and when the owner removed the graffiti overnight and demolished the building, a group of 21 street artists sued and won a $6.7 million judgment. A federal judge ruled the owner’s destruction of the art violated the Visual Artists Rights Act (VARA), which provides certain artists rights to their work even if it’s not on their property.

A graffiti-covered wall at 5Pointz in Queens, New York City, pictured here in June 2011. The building was completely torn down in 2014, setting off a closely watched legal battle.

The lawsuit was a closely watched legal battle in the art world, and it marked the first-time graffiti artists had won in a VARA lawsuit. The judge’s findings that temporary works are eligible to be protected from destruction have significant implications for street art. The biggest implications are that street art could be eligible for VARA protection if it obtains specific recognition, despite its fleeting and even sometimes illegal nature. The lawsuit was also a massive headache for Wolkoff, who decided to replace the graffiti mecca with residential development. Wolkoff was ordered to pay nearly $3 million in legal fees to the artists’ attorneys and the $6.7 million paid directly to the artists. The U.S. Supreme Court declined to hear his appeal in October 2020.

Legal experts recommend that landlords commissioning or allowing any art on their building, free or paid, seek legal counsel and ensure contracts give them full ownership rights. If they don’t, it could restrict the free use of their own buildings and even eventually affect resale value. Questions from buyers could include whether or not the art is included in the sale, what rights come from it, if the buyers could remove it, or if they could sell it.

A tenuous relationship

Camp North End in Charlotte, North Carolina, is one large mixed-use development that has thought carefully about street art. The 76-acre new construction project is a mile from Charlotte’s central business district, created out of a large, old warehouse complex. ATCO, the developers, are about to start the project’s multifamily component and are a month away from finishing Camp North End’s third phase.

In the meantime, the developer has curated 60 street art murals at Camp North End displayed on places ranging from doors to parking garages. They’ve worked with a wide range of artists, many local to Charlotte and one even being a high school student. The developer has tied the murals together with an art walk through the campus, and a local arts reporter has written gallery tags for each mural that tells the story behind them. “There’s a high bang for the buck with murals,” said Damon J. Hemmerdinger, Lead Developer and Co-President of ATCO. “You put them on blank walls that aren’t adding anything and turn them into an advantage.”

The newest mural at Camp North End by artists Neka King and Georgie Nakima. Real estate developer ATCO has curated 60 murals for Camp North End, the 76-acre mixed-use development project in Charlotte, North Carolina. (Source: Camp North End)

Hemmerdinger told me the art at Camp North End had brought “character” to the real estate development, and all the murals have been done affordably and quickly. In most cases, they give the artists simple boundaries on what they can and can’t do. For example, no violence, guns, or sex is allowed in the art, and they sometimes provide a quote or a theme to work with. Hemmerdinger said the more involved they are with the artists and the process, the less successful the outcome is.

Despite successful projects like Camp North End, the relationship between street art and real estate has historically been tumultuous. Some people see public art as essential to creating a sense of place and identity, while others may see commissioning street art as a waste of money. But for landlords, their relationship with street artists and murals has never been more beneficial than it is today. Street art has gone mainstream in a big way, and commissioning art installations brings surprising benefits. Art provokes conversations and draws attention to a property’s foot traffic and social media attention.

Graffiti is still considered vandalism, and even an eyesore at times, but it’s important to distinguish it from the beautiful murals that fill many cities today. About 84 percent of Londoners said good street art strengthens community spirit, according to research by Affordable Art Fair, an organization that aims to make contemporary art more accessible. The research also found that London residents would pay an extra £8,500 to live in a neighborhood with high-quality street art. One-third of Londoners would even choose excellent street art over a good transport connection when picking a place to live.

Commissioning a street art installation for a commercial property is more complex than it may seem, but it could provide a big bang for the buck. After all, nothing can stop most real estate owners and developers from doing it as long as legal and insurance logistics are taken into consideration. And in recent years, the trend of real estate owners commissioning street art has picked up. Street art has come a long way from its formerly subversive days.

From the humble origins of the ‘Kilroy Was Here’ meme of the WWII era to New York City subways in the ‘70s and ‘80s, street art is now a mainstay in many cities worldwide, and real estate owners have more chances than ever to use it to their advantage. But high-profile legal cases like what happened at the graffiti mecca of 5Pointz in New York City show that street art isn’t all fun and games for real estate owners. Street art can be beautiful in most cases, but property owners need to ensure all their bases are covered first. Not all street artists may be as defiant as they once were, but the relationship with real estate will likely always be tenuous.

Image - Design