Pace Gallery Is Seeking a Tenant for Part of Its New York Headquarters

Pace Gallery is looking for a tenant to take over one or more parts of its sprawling Chelsea headquarters, the latest step in what appears to be an effort to trim costs following a major restructuring earlier this year.

Julie Davich first reported the news over the weekend in her newsletter The Appraisal, writing that Pace was seeking to lease space inside its eight-story headquarters at 540 West 25th Street.

Pace spokesperson confirmed to ARTnews that the gallery is exploring bringing another tenant into the building, though emphasized that the move would not affect its exhibition spaces.

“Given the size of our building, we are exploring opportunities for a tenant to occupy a portion of our space to share in the operating costs,” the spokesperson said. “This space is not part of the gallery’s public areas and is not used by artists, collectors, or visitors, so there will be no impact on our exhibitions, programs, or visitor experience.”

The move is less of a surprise than it might appear. In June, when Pace announced a sweeping restructuring that included cutting more than 50 artists from its roster and reducing its staff by about 20 percent, CEO Marc Glimcher told the Financial Times that the gallery remained committed to its New York headquarters, despite its considerable expense. The FT reported that the building’s rent was said to be $9 million annually, a figure Glimcher neither confirmed nor denied.

Glimcher described the building as a product of a very different art market. “That building was what I call a 2015 decision,” he told the FT, referring to the art market’s frothiness when the headquarters was first planned. While he said it would not be easy to subdivide, he added that the building had “a lot of office space, so we shall see.”

In other words, Glimcher had already suggested that some kind of space-sharing arrangement might be on the table. The gallery’s new statement makes that possibility considerably more concrete.

The Chelsea flagship, designed by Bonetti/Kozerski Architecture and completed in 2019, was conceived during the height of the mega-gallery expansion era. Davich noted that the building cost roughly $100 million to construct, with developer Weinberg Properties paying for the shell; Pace reportedly spent another $18.2 million on the interior build-out.

The effort comes several months after Pace embarked on a much broader overhaul of its business. In June, the gallery also cut 50 staff jobs, along with cuts to its roster. Glimcher was unusually frank at the time about the thinking behind the changes. He told ARTnews that the goal of the restructuring was “to break the…self-reinforcing cycle of rising costs and rising prices” and get back to the gallery’s roots.

Real estate, it seems, was part of that recalibration from the beginning. Pace put its 8,600-square-foot Hanover Square gallery in London on the rental market and began looking for a smaller London location, with Glimcher saying he wanted something “less corporate.”

Finding a tenant for some of its unused office space would therefore appear to be another piece of the same strategy: maintaining Pace’s major public-facing presence while reducing the cost of the infrastructure built during a considerably stronger art market.