Dasha Zhukova’s New Real Estate Venture

The future of museum-going and cultural forays could be down in your own lobby, according to Dasha Zhukova, the arts patron and philanthropist who is launching a new residential real estate development firm in New York.

Ray, the name of Zhukova’s new brand, sets out to remedy a blind spot she sees in the residential world: the lack of arts and culture experiences in urban developments. Where other buildings and “co-living” spaces offer perks like golf simulators and dog grooming services, Ray’s buildings will offer cultural programming like master classes, events and workshops drawn from local institutions and artists to encourage creative synergy, says Zhukova, 39, with rents pegged at or below market rate.

One of the venture’s projects is reimagining Harlem’s three-story National Black Theatre, founded in 1968 by the late Barbara Ann Teer on the corner of 125th Street and Fifth Avenue, and is set to break ground by the end of May. A 21-storey building will take its place, with the new theatre space, retail and an event space spread across the first four floors, which Ray is developing with L+M Development Partners. The final structure will include 222 apartments, as well as artist studios, co-working spaces, communal kitchens, a library and a wellness space, and is slated to be completed in 2024.

Teer’s daughter, Sade Lythcott, now leads the theatre. “This project and partnership has felt [like] kismet from the time Dasha and I first met in 2019, not around aesthetics or Ray’s business model, but around our mothers. What it has meant to be women, raised by fearless matriarchs,” Lythcott wrote by email. “There is an incredible amount of equity created when you first start from a place that recognizes our shared humanity, honours what came before, in service of creating the built spaces of the future.”

Zhukova was inspired to launch Ray after seeing how visitors were drawn to the Garage Museum of Contemporary Art, the Moscow museum she co-founded in 2008. Its current home was designed by acclaimed architect Rem Koolhaas. “Even if [visitors] had seen all the shows that we had on, they would just stay and hang out in our lobby,” she says. “They would hang out in our cafe for hours on end—just come back day after day because they wanted to be in that environment.”

While hotels such as New York’s Gramercy Park Hotel have showcased art collections including names like Andy Warhol, Damien Hirst and Jean-Michel Basquiat, and developers have often staged high-end homes with trendy art to help sweeten the blue-chip price tags, one of Ray’s rental buildings will boast a permanent installation by Rashid Johnson, whose work just fetched a record US$1.95 million at Christie’s on May 11. Johnson will be creating a plant-filled installation for the lobby of a 110-unit building in Philadelphia’s rising Fishtown neighbourhood, which also will have six street-level artist studios, as well as maker spaces, and will be completed in 2022.

“Access to art shouldn’t be for a privileged few,” Johnson wrote by email. “These art and living spaces are aiming to bridge some of this gap, for me that’s exciting.”

The first two Ray ventures in Philadelphia and Harlem are largely financed by Zhukova. Ray recently inked a third deal, in Miami, where the site will expand beyond the 250-plus unit rental building that will anchor it, says Zhukova, with future plans for retail, offices, landscaped walkways and single- and multi-family homes.) With each project, Ray will emphasize new buildings rather than retrofitting existing space: “To truly rethink the space and how we occupy it…you really need to rebuild,” says Zhukova, who is looking to make inventive use of materials and space in part to make up for areas where Ray is spending more freely. “The focus [is] on how our habits have changed, the technological innovation and the cultural change.”

Her team at Ray currently eschews traditional titles—Zhukova calls her colleagues “thought partners”—and includes Will Kluczkowski, a real estate veteran from DDG; Becca Goldstein, a Stanford MBA whose CV includes a stint at a Brooklyn-based whisky distillery; and the design gallerist Suzanne Demisch.

“We are looking for creative solutions,” says Demisch, who says she enjoys the challenge posed by a limited budget. “We are asking why. There’s not a package for all the touchpoints of the experience—it’s about the aesthetic and the culture of each location.” Months were spent developing and perfecting the hand-split bricks for the facade of the Philadelphia project with manufacturers Glen-Gery and architecture firm Leong Leong—and finding the perfect Pantone swatch for the pinkish hue of the Harlem building facade, which is a nod to the historic Nigerian site the Osun-Osogbo Sacred Grove.

Such historic references were a priority of the architect of Ray’s Harlem project, Frida Escobedo, who is based in Mexico City. Art panels, inscriptions and a geometric, rhythmic facade that echo the motifs of the original National Black Theatre all refer to its previous incarnation, but “we’re also putting a great deal of focus on communal spaces, such as the artist studio and constellation of gathering areas,” says Escobedo, who is collaborating on the interiors with designer Little Wing Lee of Studio & Projects.

Zhukova, meanwhile, is partnering with Artspace, the Minneapolis-based nonprofit developer of art spaces, which will receive funding from the Ford Foundation in order to provide housing and studios at the Harlem building. She hopes to do the same in all Ray buildings. Her goal is to create accessible rents that will allow artists to remain in their home neighbourhoods rather than fleeing cities for more affordable live/work options. Zhukova next has her eye on rising cities including Austin, Nashville, Denver and Portland, Oregon, where she says they will focus on neighbourhoods that are a cultural fit for the brand.

“My personal dream is to build in Arizona,” says Zhukova. “I think in that climate and given the less restrictive building codes, you could build something absolutely incredible.”

Wildfires in California have grown more frequent and more catastrophic in recent years, and that’s beginning to reflect in home values, according to a report by the San Francisco Fed released Monday.

The effect on home values has grown over time, and does not appear to be offset by access to insurance. However, “being farther from past fires is associated with a boost in home value of about 2% for homes of average value,” the report said.

In the decade between 2010 and 2020, wildfires lashed 715,000 acres per year on average in California, 81% more than the 1990s. At the same time, the fires destroyed more than 10 times as many structures, with over 4,000 per year damaged by fire in the 2010s, compared with 355 in the 1990s, according to data from the United States Department of Agriculture cited by the report.

That was due in part to a number of particularly large and destructive fires in 2017 and 2018, such as the Camp and Tubbs fires, as well the number of homes built in areas vulnerable to wildfires, per the USDA account.

The Camp fire in 2018 was the most damaging in California by a wide margin, destroying over 18,000 structures, though it wasn’t even in the top 20 of the state’s largest fires by acreage. The Mendocino Complex fire earlier that same year was the largest ever at the time, in terms of area, but has since been eclipsed by even larger fires in 2020 and 2021.

As the threat of wildfires becomes more prevalent, the downward effect on home values has increased. The study compared how wildfires impacted home values before and after 2017, and found that in the latter period studied—from 2018 and 2021—homes farther from a recent wildfire earned a premium of roughly $15,000 to $20,000 over similar homes, about $10,000 more than prior to 2017.

The effect was especially pronounced in the mountainous areas around Los Angeles and the Sierra Nevada mountains, since they were closer to where wildfires burned, per the report.

The study also checked whether insurance was enough to offset the hit to values, but found its effect negligible. That was true for both public and private insurance options, even though private options provide broader coverage than the state’s FAIR Plan, which acts as an insurer of last resort and provides coverage for the structure only, not its contents or other types of damages covered by typical homeowners insurance.

“While having insurance can help mitigate some of the costs associated with fire episodes, our results suggest that insurance does little to improve the adverse effects on property values,” the report said.

While wildfires affect homes across the spectrum of values, many luxury homes in California tend to be located in areas particularly vulnerable to the threat of fire.

“From my experience, the high-end homes tend to be up in the hills,” said Ari Weintrub, a real estate agent with Sotheby’s in Los Angeles. “It’s up and removed from down below.”

That puts them in exposed, vegetated areas where brush or forest fires are a hazard, he said.

While the effect of wildfire risk on home values is minimal for now, it could grow over time, the report warns. “This pattern may become stronger in years to come if residential construction continues to expand into areas with higher fire risk and if trends in wildfire severity continue.”

Dasha Zhukova’s New Real Estate Venture

Ray, makes It ‘night at the museum’ every night.

Report by the San Francisco Fed shows small increase in premiums for properties further away from the sites of recent fires