1/16/2017

Update - Journal of Advanced Appraisal Studies

I recently sent notice to the Foundation for Appraisal Education (publisher of the Journal of Advanced Appraisal Studies) that I would no longer be involved with them and the journal project. After developing, organizing and editing 7 editions (2008, 2009, 2010, 2011, 2012, 2014, and 2016) and close to 140 articles from appraisers and professionals form allied fields, the time has come to move to new projects, objectives and delivery options. It was an excellent publication, has been referred to in court cases and quoted in many writings, but the time has come to move in another direction.

I strongly believe there still needs to be a publication for professional personal property appraisers to write scholarly articles to share, develop and promote appraisal principals and methodologies. So I plan on continuing with the development of a new publication dedicated to personal property appraising.

The printed book form is fast losing its appeal to many, while many similar types of publications are currently published and offered in online only format. With advances in technology such as flash flip books, enhanced PDF files, online HTML documents and changes in delivery options, I believe it is time to update the publication and availability of a professional personal property appraisal journal. With less time for reading for many busy professionals, and allowing for shorter attention spans, a new format with fewer articles may be the best path to success, enhanced readership and wider interest.

After consultation with fellow appraisers I have decided to develop a new journal format for quality article about professional personal property appraising. The new journal concept would be to publish twice a year with each journal offering 4-6 fresh and timely articles. Publishing a print edition every two years did not allow for timely reporting and contributions. The new concept for articles would be to have them published in PDF and/or flip book form online, and be made available for download without cost to the reading public.  Given the universe of professional personal property appraisers is relatively small, a free professionally developed journal would have the most reader impact, viewership research and market related influence.

After articles are submitted and reviewed I would package into an online document, post them on the Appraiser Workshops pages and/or some other online options for storage and viewing, promote the new edition and make available for online viewing and download. With this concept, I believe the articles will reach 1,000s of readers rather than the select several hundred who purchased a copy of the printed journal or were given a copy of a published article printed out by the author. As in the past, authors would retain their copyright to the material they produce, and the online version and content would assembled, promoted and distributed online.

I am now starting to consider new content for the inaugural issue for the new journal as a proof of concept publication. I am currently working on an article where I take auction prices and compare to retail pricing strategies based upon select data points, and developing the mean, standard deviation and other statistical analysis for various conversion scenarios. Several other appraisers have also approached me about contributing articles and being involved in the new journal. I do think the concept will work, and draw additional interest, be current and timely, and reach a much large audience from not only the appraisal profession, but from other professions such as wealth managers, accountants, insurance underwriters, estate planners and tax attorneys.

Keep in mind that this is an independent project and is not associated or affiliated with any appraisal organization or publisher. With that, I do not know if the Foundation for Appraisal Education wishes to continue with the journal project I started in 2008, but I will be going in a new and different direction.

If you are interested in contributing or commenting on the project, feedback and ideas are welcome and encouraged. Please don't hesitate to send me an email or give me a call.

Best,

Todd


1/15/2017

A Quick Look at Art Funds


Artsy recently published an editorial on art funds. The post gives a quick historical overview along with looking at some art fund returns, some good and some not so much.

Of course the article makes the point that investing in art funds reduces collecting to investing, with little enjoyment other than tracking the fund. No different really than investing in any other mutual fund.

Artsy reports
The idea of art as an investment vehicle has been gaining momentum in recent years, and with it a proliferation of art funds. The first fund dates back to 1974, when the British Rail Pension Fund invested in more than 2,500 works of art over six years. The scheme prospered, reportedly delivering an aggregate return of 11.3% per year compounded from 1974 to 1999.

Since then there have been numerous attempts to launch art funds, with varying degrees of success. The London-based Fine Art Fund, which recently rebranded as the Fine Art Group, is one of the longest-standing and biggest players in the market. The group currently manages eight different funds and has more than $500 million in assets under contract.

Chief executive Philip Hoffman, who founded the Fine Art Group in 2001 having worked at Christie’s for 12 years and KPMG before that, attributes his success to the mixture of art world and financial expertise his company offers. “Most art funds lack staying power and long-term capital,” he says, noting that the majority are less than two years old. “People don’t want to invest in a firm without a track record, especially after Lehman Brothers blew up in 2008.”

In 2015, Hoffman wound down his first fund, launched in 2005-06, which made an annual net return of 5%—a “respectable figure,” he says, and “better than most unleveraged funds, many of which went bust after 2008.” But some in the art trade say the return is poor. Todd Levin, the director of the New York-based Levin Art Group, says he has “a consistent annual net return of between 8% and 40% on groups of artworks with hold times of between four and 12 years.”

As the art market has changed over the past 10 years, so too has Hoffman’s business model. His first funds invested heavily in Old Masters, a category he no longer deals in, choosing instead to invest in Impressionist, modern, and contemporary art.

The Fine Art Group is also launching a lending arm to help art collectors and dealers borrow against their assets. The new company, called Fine Art Financial Services, offers up to 50% of the value of works up to $20 million, including those due to be auctioned. “We are looking towards being one of the biggest guarantors at auction,” Hoffman says. The group also offers an art advisory service to its clients.

However, many art funds have failed to adapt and have folded since the highs of 2007, when there were around 50 active globally. That figure dropped to 12 by the end of 2010, according to Fine Art Wealth Management. Casualties include Fernwood Art Investments, which went up in smoke before the recession, prompting a small group of equity investors to file lawsuits, and the Art Trading Fund, the world’s first art hedge fund, which went into liquidation at the end of 2009.

Since 2010, there has been a slight uptick in new art funds being launched. Among them is the Tiroche DeLeon Collection art fund, which was established in 2012 and invests in contemporary art from developing countries. Since March 2012, the art fund has seen a total return of 15.83%. The firm is currently focusing on sales, primarily in Asia and Africa, ahead of its five-year anniversary.

Despite a renewed interest in art funds, however, there is limited evidence that any are viable, say some trade insiders. “Art is not a liquid enough asset to produce the sort of returns that investors would want,” says Melanie Gerlis, an art market journalist and the author of Art as an Investment?: A Survey of Comparative Assets (2014). “And evidence suggests that investors would rather buy more traditional assets to make money and buy art for other sorts of returns.”

Levin suggests that art funds fail where other forms of art investment succeed partly due to the overhead required to run one. “An art fund is a very expensive proposition, due to the overhead costs eating away at one’s profit margin.” he says. “Whether one is an investor or collector, you would be better served employing an experienced art advisor on a one to one basis to build a portfolio or collection of art.”

Ultimately, Levin says, reducing art to a transaction misses the point of collecting. “The important part of collecting art is the education modality, and it is this that drives the transactional modality. One must build a certain level of connoisseurship first.” he says. “Fundamentally, the only successful way to buy art as an aesthetic object and as an investment is to spend your own money and do it yourself with the guidance of an advisor.”
Source: Artsy 


1/13/2017

Artist Disavows Ivanka Trump Work


The NY Times is reporting artist Richard Prince has returned a $36,000 payment to an art advisory who approached him about a doing a painting of Ivanka Trump and has disavowed the work. One art expert stated he did not think the painting would now be considered "illegitimate" by collectors or museums, and because of the notoriety may have actually increased its value.

Certainly an interesting appraisal question?

The NY Times reports
Ivanka Trump is an avid, adventurous collector of contemporary art who often shows off pieces from her collection on Instagram by blue-chip artists like Dan Colen, Christopher Wool and Richard Prince. But one of those works has suddenly, and unexpectedly, become a piece of political art.

Mr. Prince, in an act of protest against her father, President-elect Donald J. Trump, said in an interview Thursday that he had returned a $36,000 payment that he received in 2014 for a work that depicts Ms. Trump and that she posed next to in an Instagram post. Mr. Prince first announced his decision in a series of tweets, saying that he was disavowing the work. In language that echoed Mr. Trump’s rhetoric, he called his own work “fake” and added, “I denounce.”

Mr. Prince, one of the most revered artists of his generation and a provocateur who sometimes rattles people by freely borrowing imagery from pop-culture sources, can be a prankster on Twitter, playing a kind of fictionalized version of himself, using social media as a form of performance art. But in this case, he appears to be playing it straight. In the interview, he said he decided recently that he could no longer countenance a piece of his residing in the collection of the Trump family.

“It was just an honest way for me to protest,” Mr. Prince said. “It was a way of deciding what’s right and wrong. And what’s right is art, and what’s wrong is not art. I decided the Trumps are not art.”

The piece that Mr. Prince made was part of a highly publicized, and later controversial, series in which he turned screenshots of Instagram posts into printed paintings — a body of work that functioned as a social-media-age update of influential earlier work that he did rephotographing advertising shots and magazine pages and radically recontextualizing them in galleries and museums.

Mr. Prince said that in 2014 he was approached by an art adviser, whom he declined to name, with a request that he make a painting based a post from Ms. Trump’s Instagram feed.

“I don’t do commissions, and so what I said to the guy was, ‘Let me look at her feed and see if I like it, and if I do I’ll do it,’” Mr. Prince said. “I found an image of her that looked like it was made up. It looked like the kind of thing I was interested in.” He added, of Ms. Trump: “I don’t care who she is. I care more about who I think she is.”

He continued: “She posts a lot of pictures of herself. It means I get a whole bunch of choices. I don’t have to meet her. It’s not Richard Avedon. I don’t have to invite someone over to my studio or meet them. I just find an image that I can imagine is what somebody is really like.” Of his interest in Instagram in general, he said: “It’s like going down a rabbit hole. It’s like a giant magazine. It’s frankly a lot of fun.”

Mr. Prince said that on Wednesday he had returned the original price of the Ivanka piece to the art adviser who had requested it. It’s unclear whether Ms. Trump herself or someone close to her bought the work, which uses an Instagram post with an image showing her getting her hair done. (In the Instagram post where she poses with the work, she thanks Mr. Prince and comments that she loves the piece.)

Ms. Trump, through a spokesman, declined to comment on Thursday. But a person in her circle, who was not authorized to speak about the matter because of the personal nature of her art purchases and collection, said the money was in the process of being returned by Mr. Prince.

Asked if he thought his disavowal would have any effect on the piece’s status as a legitimate Richard Prince work or on its market value, Mr. Prince said: “Whether it will affect anything is not the point. It’s a way of me saying to them I don’t want my work in your possession. I don’t want anything to do with your family.”

There is ample historical precedent for artists declaring works null and void, but not much evidence that they have the power to withdraw a work once it has fully entered the public realm. In 1963, for example, the sculptor Robert Morris, angered that the architect Philip Johnson was late in paying for a work, wrote a kind of affidavit negating the “aesthetic quality and content” of the piece. But both the piece and the manifesto are now in the collection of the Museum of Modern Art as Morris works.

Joshua Holdeman, a Manhattan art adviser and a former vice chairman at Sotheby’s, said he believed Mr. Prince’s excommunication of the work would probably not cause collectors or museums to treat it as illegitimate in the long run and he added that it might indeed increase its value.

“As far as the market is concerned, if an artist says a work isn’t by him, but it’s clear that he made it and presented it as his work, well it kind of is what it is,” Mr. Holdeman said. “My intuition about this is that when history plays out, this will probably end up being a more culturally rich object than if this whole episode hasn’t happened.”
Source: The NY Times


1/12/2017

A Look at the Growing Market of Furniture Designer Paul Evans


The NY Times takes a look at furniture designer Paul Evans and the growth of interest in his work, as well as the expanding prices. Or as the article states, from the"dustbin to the deified". The article shows how decorative arts styles and tastes can change over time. This is of course so important for the professional personal property appraiser.  Appraisers must always stay in touch with the market place, trends and changes in taste.

It is a pretty long article, so I only posted the first portions of it, for the full article in the NY Times follow the source link below.

The NY Times reports
Perhaps the most remarkable thing about the furniture designer Paul Evans’s posthumous ascent is not that he has gone from dustbin to deified over the last decade, or that his work has been collected by big names like Gwen Stefani, Lenny Kravitz and Tommy Hilfiger.

It is that his signature pieces — 1960s credenzas that look as if they are encrusted with barnacles — have been met with turned-up noses and occasional disgust from the most powerful people in the design world.

J. F. Chen and Wyeth, arguably the country’s two leading galleries for midcentury modern design, have practically made a point of ignoring Mr. Evans, even as his offbeat works break auction records.

“I have two Evans pieces in my showroom, and neither of them look like Evans,” said Mr. Chen, speaking from his office in Los Angeles. “It’s not my thing.”

Never mind that a wavy-front cabinet designed by Mr. Evans in 1967 sold for $287,500 in 2015, moving into the upper echelons of American furniture. “And who would have seen that coming?” said David Rago, who sold it through his auction house, Rago Arts.

Not Richard Wright, who eight months later beat that number when he sold one of Mr. Evans’s silver aluminum and black paint cabinet pieces with dripping squiggle-like seams through his company, Wright, in Chicago for $293,000.

Three coffee table books focusing on Mr. Evans have been published in the last decade, including one by the New York-based dealer Todd Merrill, whose TriBeCa-based showroom teems with Mr. Evans’s chrome case pieces and steel coffee tables that look as if they were built from stalagmites. Two mini-documentaries about Mr. Evans’s life, one produced by Mr. Merrill and another by the design journalist Daniella Ohad, have been completed. In 2014, the James A. Michener Art Museum in Doylestown, Pa., staged a retrospective of Mr. Evans’s work.

But having designed mirrored sofas with a Mondrian-by-way-of-Liberace vibe, Mr. Evans simply can’t be explained in the same breath as Hans Wegner, whose teak coffee tables and wool-covered Papa Bear chairs serve as Modernist shorthand for all that is ordinarily admired about midcentury design and its imperviousness to the cool-today, tired-tomorrow quality of decorating trends such as overdyed Persian rugs and fiddle-leaf fig trees.

“I’ve seen interiors that are all Paul Evans; it’s not really where you want to go,” Mr. Wright said on a recent afternoon, as he planned an auction for 37 of Mr. Evans’s most gloriously tacky, gloriously disco pieces, which takes place Thursday in Chicago.

In all likelihood, it will do very well for him.

Amid a status-obsessed, contemporary art scene where the kitschy ironic and the easily identifiable are prime selling points for artists (see: Richard Prince and Andy Warhol), it makes some sense that the man who is becoming the most collectible American furniture designer of the late 20th century is also considered by many to be the least deserving of that designation.

A furniture-world Forrest Gump, Mr. Evans — who grew up in Newtown, Pa., where his father taught English at a Quaker school — morphed with the times. He understood fashion, embraced youth culture and built custom pieces for celebrities like the ventriloquist Shari Lewis and the singer Roy Orbison. That ability “to transform as the culture around him was shifting” gave him posthumous appeal, said Kirsten Jensen, the chief curator at the Michener Art Museum.

In the folksy ’60s, Mr. Evans designed ornate welded steel-front cabinets that drew inspiration from the sculpture work of Picasso, Harry Bertoia and Julio Gonz├ílez. His twist was repositioning those influences within his own beatnik framework.

Without much money, he and his studio partner Phillip Lloyd Powell even got their wood from the reject pile of George Nakashima, their neighbor in New Hope, Pa.

At the height of his success during the disco ’70s, Mr. Evans teamed up with the furniture behemoth Directional, where he and a team of 70 produced the now-coveted chrome-and-brass-accented Cityscape line, including a headboard shaped like a marquee — complete with electric glow bulbs. (For extra money, Mr. Evans and his team installed upholstery in Studio 54.)

In 1980, disco fell out of favor and Mr. Evans’s business hit the skids, so he closed the studio in New Hope, moved to New York and designed sleek, industrial beds and wall units that could be rotated or raised via remote control. Bring on the boxy-suit-wearing bankers and their social X-ray wives!

By the mid-80s, Mr. Evans was no longer making a living and he began drinking heavily.

On March 6, 1987, he shut down his business and drove from New York to his vacation home on Nantucket. The next morning, he went for a cup of coffee on his porch, had a massive heart attack and died, said his assistant Dorsey Reading. He was just 55.
Source: The NY Times 


1/11/2017

Heritage Auctions in 2016


Heritage posted a press release on its sales and major accomplishments from 2016.  The Dallas auction house saw sales of $850 million, making Heritage the third largest auction house in terms of sales. Fine art sales were up 28%, and opening offices in Palm Beach, Florida, and a full-service showroom in Chicago, Illinois. Of the $850 million in sales, $344 was from online sales, making Heritage the number one online auction house. The press release also stated Heritage leads the industry with highest number of unique online visitors.

Heritage reports
DALLAS — Heritage Auctions announced sales of more than $850 million for 2016, the firm's third-best year ever, and nearly equal to its 2015 sales of $860 million. The results are a signal of the company's continuing dominance in the collectibles realm while other major auction houses recorded significantly lower sales volume for the same period.

Heritage's fine art category recorded a 28 percent leap in 2016 — in stark contrast to sales at its two largest competitors, both of which saw sales decline by approximately 30 percent.

"Through diversity, transparency and ardent attention to our clients, Heritage solidified and increased its commanding lead as the largest auction house founded in America," said Heritage Co-Chairman James Halperin. "And we're anticipating an even better 2017."

U.S. Coins remains Heritage's largest category, with 2016 auction totals exceeding $192 million, outselling all other numismatic auction houses combined by a wide margin according to the Professional Numismatists Guild annual survey, which shows Heritage maintaining its 56 percent market share.

World & Ancient Coins at Heritage realized about $47 million, while Currency posted over $29 million auction sales. Both categories also showed early signs of increased market strength at major Heritage auctions in Florida and New York which realized almost $70 million during the first 10 days of January 2017.

"Based on late 2016 and early 2017 auction results, the U.S. Coin Market remains upbeat, with prices now already 10 to 12 percent above the previous years' prices, on average," Halperin said. "We are already seeing extremely positive results from the first coin auctions of the year. Meanwhile, our plans to expand into other markets and geographic regions are on track."

Several of Heritage's other categories set records:

· Heritage's Sports auctions grew from $42 million in 2015 — already more than double any other auction firm's Sports Collectibles sales — to an incredible $57.4 million in 2016.

· Heritage's already-dominant Comics and Comic & Animation Art Auction category was another juggernaut, with total realized auction prices realized jumping from $34 million to a record $43 million, again outselling all other auction competitors combined.

· Fine Jewelry, Timepieces and Luxury Accessories at Heritage combined for a solid year as well, with more than $41.7 million in auction totals (more than $30 million in Jewelry and Watches and more than $10.7 million in Luxury Accessories), versus more than $26 million ($15 million in Jewelry and Watches & $11 million in Luxury Accessories) in 2015.

· Movie Posters posted sales of $7.95+ million vs. $7.4+ million in 2015.

· Luxury Real Estate saw sales increase to $19 million vs. $11.2 million for 2014 and 2015 combined.

· Wine recorded auction totals of $10.8 million in 2016 vs. $7.55 million in 2015.

Strategic growth continued as:

· The company expanded its national footprint, opening an office in Palm Beach, Florida, and a full-service showroom in Chicago, Illinois.

· For the first time, Heritage's clientele now includes more than 1 million online registered bidder-members, with nearly 90,000 new members added in 2016.

· The firm also maintained its online lead, with the total number of unique visitors to HA.com holding steady at nearly twice the combined total number of unique visits the websites of Heritage Auctions' five closest competing web sites.

· Online sales (reported in early 2016 for 2015) were $344 million – surpassing all other auction houses; 2016 online sales figures are now being compiled and will be released soon.

Heritage Auctions is the largest auction house founded in the United States and the world's third largest, with annual sales of more than $850 million, and over one million online bidder members. For more information about Heritage Auctions, and to join and receive access to a complete record of prices realized, with full-color, enlargeable photos of each lot, please visit HA.com.
Source: Heritage Auctions


1/10/2017

Top 10 Searches on The Clarion List


The Clarion List recently sent out a press release on their continued growth and expansion. The Clarion List has new locations for 20 new cities and 4 new continents, with now 7,000 listings, in 70 markets and on 6 continents.  The growth rate has been amazing, and the percentage of claimed listings has in the US market is now up to 30%. This shows how credible the Clarion List has become.

Congratuatlions to The Clarion List for their growth, if you have not claimed your listing, visit at www.clarionlist.com and sign up for this great service. But, what I found most interesting was the release by the Clarion List of its most-clicked service categories for 2016. They dont list numbers for each category, but "Art Appraisers" was number 2 on the list, with "Art Consultants" listed as the top searched service.

This list fits in very nicely with my recent posts about expanding appraisal practices and taking advantage of new technology to both promote an appraisal practice and to use in developing new appraisal related services for clients.

Other top searches on The Clarion List included art logistics, art law and art accountants.  All who could potentially use the services of an professional personal property appraiser.

The Clarion List reports
The Clarion List has released exclusive market data revealing its most-clicked
service categories in 2016:
  1. Art Consultants
  2.  Art Appraisers
  3. Art Transport, Storage & Installation
  4. Art Conservators
  5. Art PR & Marketing Firms
  6. Art Law Firms
  7. Collection & Gallery Management Software
  8. Art Insurance
  9. Art Accountants
  10. Art Fund Managers
Jessica Paindiris, CEO of The Clarion List stated “Art Consultants’ is our most-clicked category, suggesting that expert consultation is still in high demand, no matter the market highs or lows. New and aspiring collectors are rightly look for help entering and navigating the art world. Even veteran collectors need expert assistance or advice from time to time. Our audience is searching The Clarion List for these expert service providers, often for time sensitive projects and this is something Google just can’t do.”
Source: The Clarion List 

1/09/2017

The Art Market in the UK


Bloomberg has an interesting article on the a rebound in the UK art market in the final quarter of 2016. Follow the source link below for some interactive charts and graphs. Part of growth is foreigners buying in London due to the weakening pound and the strength of the US dollar. The strength in UK sales has been seen in many categories and not only contemporary art, but included old masters and even antique furniture.

Bloomberg reports
London's streets were packed over Christmas with tourists from the Middle East, China and the U.S. weighed down by Gucci, Rolex and Hermes shopping bags. They've had to move pretty sharpish to take advantage of the Brexit-induced fall in sterling, as the big brand-owners hike their British prices to readjust to the change.In the U.K. art market, there's been no such need for foreign buyers to rush. While sellers have benefited from weak sterling, their chastening experience earlier last year will discourage them from trying to raise prices too quickly. In the first eight months of 2016, auction sales of fine art in Britain and the U.S. slumped compared with 2015, according to Artprice.com, which collates auction results. Buyers were unnerved by the political uncertainty around the world, with a particular impact on contemporary works.

Sales of works of art at auction slumped between January and August 2016

But Britain experienced a bit of a sterling-induced rebound in the three months between September and November. Some auction houses detect similar: Bonhams estimates that since Brexit, lots have sold for 20 percent above lower-end estimates -- not far off the slump in the pound. Works coming to market for the first time, with solid provenance, have performed best.

Brexit Bounce

The slump in sterling helped overseas art buyers, lifting U.K. auctions sales between September and November

Difficult categories such as old masters, early sculpture and antique furniture also sold well in the autumn auctions, in part because of sterling, according to online auction group Auctionata Paddle8.Of course, currency isn't the only thing at work. Particular sales attracted attention to the British market. Sotheby's November auction of David Bowie's personal collection raised 32.9 million pounds and was 100 percent sold.

London Calling

The U.K. art market was second only to the U.S. in 2015

Sellers may eventually try to adjust London prices higher. But the contraction in the international market will probably stay their hand. Global art sales were $63.8 billion in 2015, a 7 percent decline from the record $68.2 billion in 2014, according to Arts Economics. Last year was probably worse still. Any recent Brexit boost won't have helped the post-war and contemporary sector much, as that market's more concentrated in New York. There were also fewer works available in the top-end $50 million-plus category, which will probably depress the overall figures.

What's more, the political uncertainty could affect mid-market collectors -- those spending up to $1m on an individual work. By contrast, any tax cuts from Donald Trump would probably boost demand for works valued at more than $10 million.It's a little like the separation we've seen in luxury goods in Europe and the U.S. The very rich keep spending on top-end Chanel jackets, crocodile Hermes Birkins and Audemars Piguet watches. But the middle of the market is often being squeezed.Still, if a so-called hard Brexit comes to pass, those sterling-denominated bargains might be hard to leave on the auction house wall.
Source: Bloomberg