The biggest thing at the museum these days isn’t the latest impressionism exhibit or photography talk. It’s the real estate surrounding the museum building that’s generating buzz.
A number of cities around the globe have discovered that a new museum or arts district not only revitalizes downtowns, they improve real-estate values as well. Home buyers are drawn to the buildings’ bold architecture, as well as the rotating exhibits, guest lectures and attractive indoor and outdoor common areas.
What’s more, the museums attract corporate employers and tourists, bolstering the neighborhood’s restaurant and entertainment scene. The phenomenon is what’s now called the Bilbao effect—named after Guggenheim museum in Bilbao, Spain, which opened in 1997 and was a catalyst for the revitalization of the Basque town.
“Museum developments enhance neighborhoods and boost the value of real estate nearby,” says Stephen Sheppard, an economics professor at Williams College in Massachusetts who studies the impact of new museums on nearby real estate. According to his research, property values of homes near museums rise between 20% and 50% over the course of five years to create “vibrant communities.”
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Published by the Wall Street Journal on November 25, 2018: Written by Alina Dizik