Two Trees Hikes Rent on Artists During Commercial Downturn

When the developer David Walentas started buying old warehouses and factories along the Brooklyn waterfront in the 1980s, the tenants included artists. He let some stay at low rates, even as he became the biggest landlord in the neighborhood that would eventually be named Dumbo. Some even paid rent with paintings. “We want to maintain artists in the neighborhood,” Walentas said in 2002. And when asked whether he planned to kick them out, he explained: “I don’t need the money.” But since 2020, the commercial real-estate market that propped up this generosity has fizzled out, and the Walentas family is raising rents on some of the artists who once gave the neighborhood its marketing edge.

On Thursday, the painter Sharon Butler was packing up her third-floor studio at 20 Jay Street, folding the cardboard tabs on bankers’ boxes and carefully filling them up with what she calls her “archive” — decades of artist catalogues, some marked with personal notes from friends, colleagues, and students who participated in the nonprofit arts organization she founded in 2007, Two Coats of Paint. Butler first moved into a Two Trees building in 2014, when the family company created what it called the Cultural Space Subsidy. The program asked artists and nonprofits to submit portfolios to win a three-year lease for studio space and gave an initial cohort of 17 artists and nonprofits studios for $1 per square foot per month, a price Butler described as “unheard of, impossible” and which she estimated has saved her about $250,000 over a decade. “I was really lucky to get this place,” she says. Like a few other artists who joined, she never moved out — instead reapplying without issue and getting one year tacked onto their lease in 2020. But this spring, the cohort got hard news. No one was being renewed, and anyone who wanted to stay had one option: Negotiate with a commercial broker, who quoted them rates between $2 and $3 a square foot, or double or triple their rent. That might have been below market for Dumbo, but it was tough to face for artists: A 1,000-square-foot studio that might have cost $1,000 per month plus $300 in taxes and fees a month was suddenly as expensive as a one-bedroom apartment. Artists who join the program in January will apparently be charged $1.50 per square foot per month — or $1,500 for that 1,000-square-foot studio.

Butler has open hours for the public during open-studio events and events for her Two Coats of Paint nonprofit.
Photo: Adriane Quinlan

Artist studios line the hallways on the lower floors of 20 Jay Street.
Photo: Adriane Quinlan

Andrew Ross, a sculptor with a smaller space downstairs, tried to negotiate a lower rent, then, failing that, tried to negotiate to pay the higher rate for only six months, when he will get a break from teaching. But it didn’t work. “They really weren’t budging much,” he said. The artist Caledonia Curry, better known as Swoon, is planning to move out after being quoted a triple-high rate. And artist Mark Tribe looked into staying but felt that paying what might only be a slightly cheaper rate for Dumbo didn’t make sense: The neighborhood could sometimes be “mobbed with tourists,” he said. Ross, the sculptor, has “no complaints,” he said. But he doesn’t want to leave, and when he runs through the inventory of what he’ll need to pack into his apartment studio or throw into storage it’s clear why: There’s a mechanized router that’s three-feet across, four 3-D printers, a large-format laser printer, wood-working tools including saws, and bags and bags of clay. To have to move all of this is, he said, “unfortunate. But I also understand.”

Andrew Ross in his subsidized studio. Behind him is a large-format printer and, above it, four 3-D printers that he plans to move into storage while working out of a home studio.
Photo: Adriane Quinlan

What Ross and other artists understand is that they were the temporary beneficiaries of a precarious ecosystem. Jed Walentas, David Walentas’s son who is now in charge of the family firm, has been open about the nightmare of commercial real estate. He told The Wall Street Journal this month that even finding tenants for the family’s trophy — the former Domino Sugar factory, which cost about $2.6 billion to buy and rehab — has been “wildly challenging.” And he said those who did move there include start-ups that he said “could go ‘poof’ tomorrow.” 20 Jay Street was once dependent on those start-ups, subsidizing rents for some of them through an incubator, which lured other tenants; a “densely packed start-up ecosystem” was a draw for a law firm that talked to the press about moving there in 2014, and by 2016, tenants included the delivery app Postmates. But tech companies have since flown to the Flatiron District or Hudson Yards or gone remote, giving up the kinds of art-adjacent offices that Two Trees specialized in. A sign outside 20 Jay Street now advertises chunks of space upstairs between 500 and 50,000 square feet, and a 6,000-square-foot retail space on the river side of the ground floor is currently empty. In some cases, the landlord explained the rent hike for artists by explicitly citing challenges in commercial real estate.

Photo: Adriane Quinlan

The building still has a handful of tenants. Upstairs, there are creative-marketing and public-relations agencies — Red Antler and BPCM — and e-commerce companies like Tushy, the online bidet seller. This fall, Aveda announced plans to move its cosmetology school there. But other tenants don’t seem flush with cash, and some even came as winners of the subsidy program; there are documentary-production companies — POV and Chicken & Egg Pictures — and niche nonprofits including the Public Policy Lab, Brooklyn Arts Council, and Democracy Works.

Last fall, in a tough market for borrowers, Two Trees refinanced a loan for the building — $108 million that will come due in 2028, a short turnaround. Two Trees didn’t respond to a question about the building’s finances, and the research firm that in the past has provided data on vacancy rates and average rents in the building declined to share any with Curbed. (It is now represented by the same publicist as the landlord.) But the company did confirm the changes to the program and cited the obvious: “The actual story of our Cultural Space Subsidy Program is a good and generous one,” said David Lombino, director of external affairs at Two Trees. “We have supported hundreds of artists over the years through below-market rents, in good economic times and bad. And no good deed goes unpunished.”