Book Review: Rogues' Gallery by Philip Hook

Mark Bench of Borro sent me a February Financial Times review of a book by Philip Hook called Rogues' Gallery, A History of Art and its Dealers. Since I am now limited/restricted in what I can use from the Financial Times, I found another review of the book in the Guardian.  A partial excerpt is posted in the block quote. It looks like an interesting read and shows how money has long played are part in the art market.

I just order a copy of the book.  Follow the source link below for the full review.

The Guardian reports

Philip Hook’s fascinating and elegantly written book is a close examination of the history of the art-money nexus and the middlemen – the art dealers – who make the connection. He guides us expertly through the very beginnings of dealership in the Renaissance – where there were agents and merchants selling art – and then, in the 17th century, he introduces one Hendrick van Uylenburgh of Amsterdam as possibly the first art dealer to whom we can properly apply the term. Uylenburgh employed Rembrandt in his workshop and effectively became his dealer, gaining him many commissions for portraits. Half of the 100 or so portraits Rembrandt painted were done in his four years with Van Uylenburgh, who had spotted a lucrative market.

Hook goes on to analyse the increasing complexities of the role of the European art dealer as the centuries move on until, arriving at the middle of the 1800s, we come across a world recognisable as almost contemporary in terms of its commercial aspirations, cash flow and aggressive business methods. Late Victorian art dealers such as Ernest Gambart, Joseph Duveen and the Wildensteins would give today’s Flash Harrys of the 21st century market more than a run for their money. They became extremely rich – and in the process made some of the artists they represented extremely rich. This relationship was the evolution of a Faustian pact between artist and dealer that was, even then, highly problematic. Marcel Duchamp described dealers as “lice”. Love them or loathe them, they became essential to artists.

But, as Hook takes pains to point out, not all dealers were venal exploiters of naive artists. Certain famous dealers changed the face of art history because they decided to champion artists and movements that were derided and, at the time, monetarily worthless. Hook cites, among others, Paul Durand-Ruel and the impressionists; Ambroise Vollard and his untiring support of Paul Cézanne; and Daniel-Henry Kahnweiler’s steadfast boosting of cubism. Without these dealers’ persistence or belief in these scorned artists it can be convincingly argued that the history of art would have been very different. The dealers’ avant garde tastes were duly vindicated – and their risky ventures ended up making them fortunes. “It’s the old dilemma of the thinking dealer,” Hook writes, in relation to Léonce Rosenberg, who was, for a time, Picasso’s dealer, “which should predominate, art or money? There is an underlying sense that the two are in conflict. Art is a high-flown beautiful commodity. Money is sordid, but necessary. How to resolve it?”

Hook’s implicit answer is that it is always resolved in favour of money. Certainly, as the 20th century advanced, any Vollard-style “idealistic” dealing is harder to spot. Of course there have always been cultured and informed collectors and dealers, who follow their tastes and instincts and avoid the faddy and the tendentiously modish. But they were and are rare birds. As the international art market evolved and was transformed after the second world war, so the profit motive and the fame-quotient came to bear overwhelmingly on what was valued and therefore what had to be purchased and flaunted.

Source: The Guardian

Administrative Tasks When Collecting Art

Artsy recently post a good article on some of the more administrative aspects of owning art. It touches on shipping and handling, insurance and security issues. As appraisers, as we discuss collections and collecting with clients, we typical bring up topics such as insurance, proper storage and security concerns. The Artsy article is a good primer for appraisers when discussing these topics with clients. I actually wrote an article on many of these topics as well for the 2016 edition of the Journal of Advanced Appraisal Studies, called Collection Protection.

Artsy reports

There’s a lot of advice out there about how to buy art—from how to decide what works you actually want for your collection to what you should know going into an auction. But the purchase of a piece is just the first step in the larger process of owning art. As with a home or car, art requires specialized care, maintenance, and insurance. Fortunately, there’s a whole universe of specialists out there who can help. We spoke to a number of them about what you should do after purchasing a work of art.

Shipping and Handling

Simon Hornby, CEO of Crozier Fine Arts, said the first consideration in getting a work across any meaningful distance (i.e. far enough that the work cannot be taken home in a cab) is careful wrapping: All artworks should be protected so that the work will have as little unintended contact with the wrapping as possible.

Even actual packing materials, he notes, can be deleterious to the work—he recalls one plastic statue that had an instant chemical reaction with the bubble wrap used to pack it, leaving the imprint of the bubbles on the work. Paintings, he noted, are often not fully dry; those should be boxed so a few inches remain between the face of the painting and the box around it. Fine art handlers are accustomed to dealing with novel shapes, sizes, and materials, Hornby said, and will often turn to other industries for new solutions—he’s even borrowed a few tricks from the shippers who transport freshly painted NASCAR cars.

For moving works longer distances, he suggests an art shuttle—a moving company that travels along roughly set routes (up and down the East Coast, through the Southwest, to and from the West Coast). They’re the most cost-effective way to move works, he said, and still get the benefit of a trained art handler.

Alternatively, said Alain Servais, a Brussels-based collector, you can ask the artist or the gallery to crate the work carefully, and then ship it with a volume carrier like UPS or FedEx. He negotiates the crating at the time of purchase, and said he’s never had a problem moving art this way. He has also asked galleries if they can bring a purchased item (say, a work he bought in Mexico City) with them to a closer art fair (such as one in Paris), cutting down on the cost of shipping he’ll ultimately have to pay.

If you are using a fine-art shipper for international transport, be sure to get at least two or three competitive quotes, Servais said. And as soon as you’ve bought the work, be sure to take pictures of it and ask for a condition report, to ensure you get the work you paid for and in the same condition as when you bought it.

Insuring for Safe Passage

Seasoned collectors will typically have a specialty fine art insurance policy that covers their artwork from the time of purchase, said Rand Silver, global director of art collection management for AIG Private Client Group. New collectors should check with their insurance brokers to see whether their existing homeowners insurance covers fine art purchases—and when. Often, Silver said, coverage for purchases doesn’t start right away with homeowners policies, something people only find out once an item has been damaged. He estimates that about 60% of AIG’s claims for fine art are due to damage during transit and accidental damage (such as in hanging).

Christiane Fischer, president and chief executive of AXA Art Americas, knows that reading the fine print of insurance policies isn’t what some new collectors—lured to their first purchase by the flash of the art world—had in mind when they embarked on the long journey of collecting. “There’s nothing sexy after you buy a work of art,” she laughed.

Still, having insurance is critical, though there can be barriers beyond the complexity of any given plan. For new collectors on the younger side, the whole concept of picking up a phone and actually calling a broker for insurance is alien given the nature of e-commerce today. So AXA launched a digital portal in March where those with collections of up to $1 million can simply purchase insurance online—perhaps even for work they bought online to begin with.

Even as insurance becomes easier to obtain, “our biggest competitor is the uninsured,” said Fischer. “Our major task is to educate people.” She offers a few important tips: Make sure that you have all the relevant documentation proving title to a work if you need to make a claim. Also, even if you’ve purchased a fine art policy to compliment often inadequate homeowners insurance, be sure that it keeps up with the increasing value of the work 10 or 20 years down the line. Trouble can also arise if you’re insured through a shipper, some of which will compensate you in the case of damage by the weight of the object (so much for recouping the full value of your Andy Warhol balloon, popped during transit).

However, when a work is broken, pursuing an insurance claim as a first resort may not always be the most efficient route, said Servais. Sometimes, particularly if the artist is still alive and working, a quicker and cheaper solution can be found. For example, a friend of one of his children knocked over a €12,000 Gabriel Kuri sculpture of his that consisted of two pieces of marble holding a catalogue. The marble shattered, and Servais and the child’s horrified and apologetic parents spent months dealing with the insurance company before Servais found himself on the phone with the artist, who it turned out had another piece of the same marble in his warehouse. The replacement cost for the marble, including shipping it over, worked out to around €400, which, Servais observed, also makes clear the amount of “good will” he’d purchased for the artwork’s original price of €12,000.

Keeping It Safe

One of the biggest mistakes new collectors make is thinking they can bang a nail into the wall and hang up a new painting. Not so.

“Resorting to professional art hangers is sometimes not a bad investment,” said Servais, rather than saving a few bucks by trying it to do it yourself. “Because quite often you have your whole family, your wife and kids looking, and in front of you it comes crashing to the floor.”

There are a number of questions to ask before hanging or installing a work, such as: Where will the art live? What is the wall made of? Does the wall behind that painting have a pipe that can burst? A fine art handler should know what type of hardware to use depending on the wall’s material, the weight of the object, and what, if any, attachment points the artist has already designed for the work, said Hornby.

Then there’s location: Is that sculpture within easy reach of an especially active cat or exuberant child? Is the narrow corridor between the kitchen and dining room really the best place for a painting? Silver said he had one case in which a painting that had been hung above a fireplace melted once the fire was lit.

“Ideally we’d like all our clients to encase things in Plexiglass, but we understand people like to live with art,” said Silver.

At least when you’ve seen a work set ablaze you know it’s in trouble. Shoddy framing with poor quality materials can damage a work slowly over time, almost imperceptibly, until it is too late, said Jed Bark, founder of Bark Frameworks (which is now employee-owned). Sitting in the 27,000-square-foot Long Island City workshop, Bark explained a few of the hidden risks of bad framing for prints and photographs, particularly: Mat board made of wood pulp will release chemicals that damage a work’s material, or sloppy workmanship can mean that when you open a frame the piece rips. Then there is UV light, which can gradually change the color of your print or photograph, unless filtered out by a glaze.

If you’ve purchased a work at auction or even from a gallery, don’t assume the frame that comes with the piece is for the long haul. While some artists custom-make frames to accompany their works for life, other times the frames are meant mainly for short-term display.

“There are some telltale indicators of whether some work has been well framed or carefully framed,” said Bark. “The real issues for someone who just purchased a work are: Is the work at risk from the framing practices [used]? And is the framing actually protective?” The answers may not be readily apparent—never open the frame yourself to check. Instead, Bark recommends calling the framer.

Since there are no industry-wide standards, and lots of framers promise “museum-quality archival framing” without really backing it up, choosing a framer with a strong reputation is paramount. Otherwise in 20 years when you’re looking to sell that print to pay for your child’s college, the auction house condition report might reveal that it’s been terminally damaged by bad framing. The major lesson is that framing isn’t simply a decorative addition—it’s part of conserving a piece of often irreplaceable art.

Todd Levin, a New York-based art advisor and director of Levin Art Group, said that even with all precautions in place, contretemps occur. Clients of his recently bought a painting for seven figures in Europe, which they needed to ship to the West Coast. He offered to help coordinate the shipping, but they decided to handle it themselves.

He subsequently received a panicked call from the clients: The crate had arrived at the art shipper’s warehouse on the West Coast severely damaged, the top of the crate sheared off, and the painting sitting wrapped but otherwise totally exposed. By some miracle, the museum conservators he hired to evaluate the painting and frame concluded it had suffered no damage.

“That was extraordinary luck,” he said. “Needless to say, the client now confers with me for all shipping arrangements, and will be accepting the shipper’s insurance in addition to the transit insurance offered on their personal fine arts policy going forward.”

Source: Artsy 

The Arts In Los Angeles

Apollo Magazine has an interesting article on the growth of the art market in Los Angeles. The name of the article "Is LA’s art scene growing too quickly?" and discusses the growth of new private museums, gallery openings and working artists int he area. Below is a partial excerpt of the article, follow the source link for the full article.

As usual, ISA's annual conference always seems to be timely and with its finger on the pulse of the fine and decorative art markets, and the 2018 annual conference is being held March 9-12, 2018
The Westin Pasadena in Pasadena, California. Save the dates.

Apollo Magazine reports (follow the source link below for the full article)

Over 50 galleries opened in Los Angeles between 2013 and 2016, a number of them decently-funded satellites or plants with European or east-coast bases. Three sizeable private museums opened, or prepared to open, each comparable or bigger in square footage than LA’s Museum of Contemporary Art (MOCA).

Eli Broad, the third richest man in LA County and a collector who has had his hand in local arts institutions since the late 1970s, put his museum right across from MOCA on Grand Avenue in the centre of downtown. Broad, who refers to himself as a venture philanthropist and prefers that his investments make a profit, spent $140 million on the 120,000 square-foot building. He wanted it next to both MOCA, established in 1979, and Frank Gehry’s ambitious 2003 Disney Concert Hall, two buildings to which he donated substantially and then strongly influenced – ‘Eli’s middle name is “Strings Attached”’, said LA Times art critic Christopher Knight. Since the early 2000s, Broad argued that Grand Avenue could become the Champs-Élysées of Los Angeles, insisting that his notoriously sprawling, centreless city should have a cultural thoroughfare just like Paris. Then in September 2015, two weeks before the Broad Museum opened, Broad adjusted his rhetoric. ‘At one point I misspoke and said that Grand Avenue was going to be the Champs-Élysées of Los Angeles,’ he told the New York Times, ‘which may have been an exaggeration.’

Other private contemporary art museums are opening, their founders matching and even outstripping Broad’s ambition. When completed, the Main Museum, founded by real-estate mogul Tom Gilmore and his partner Jerri Perrone, will take up 100,000 square feet of former bank and office buildings at the corner of 4th and Main, just a few blocks west of Skid Row. Renderings by architect Tom Wiscombe show a black, futuristic, swirling protrusion on the façade. While construction continues, the raw, half-finished lobby of a bank building currently hosts an exhibition of Alice Konitz’s modular circle and triangle chairs, usable sculptures that invite engagement in a way that the Broad’s Jeff Koons’ sculptures and Andy Warhol’s paintings can’t.

Paul and Maurice Marciano, brothers and co-founders of Guess jeans, opened their museum on Wilshire in the middle of the city on 25 May. With the help of local architect Kulapat Yantrasast, who has a minimal aesthetic and an art-world following, the brothers renovated a 110,000 square-foot former Masonic temple. Many of its once lavish rooms, which fell into disrepair after the Masons moved out in 1994, are now white-walled exhibition spaces, though some colour remains (mosaic murals, for instance). The debut exhibition, curated by former MOCA curator Philipp Kaiser will, purportedly, bring ‘together an international, multigenerational roster of artists who are among contemporary art’s leading creative and critical voices’, though all of these ‘voices’ will be extracted from the 1,500 works the Marcianos already own. Blogger William Poundstone, after doing an informal inventory of the Marciano collection, concluded that it has significant overlap with the Broad. Both museums own versions of the same sculpture, a sterling silver anime Buddha by Japanese maverick Takashi Murakami, and different works by Alex Israel, an LA native who always wears sunglasses and mines SoCal clichés with a deadpan sense of entitlement.

Source: Apollo Magazine 

Starting an Art Collection on a Budget

When it comes to investing in fine art, so many times we only see and hear about the top end of the market, and that the lower and middle is very soft. That can also mean there are opportunities at the lower end if done correctly. The Guardian has an interesting article on collecting art, and shows there are many opportunities at the lower end for quality works.

The Guardian reports

This is the time of year when budding artists around the country are busy putting the finishing touches to their final degree showpieces, the fruits of their past few years of artistic labour. Starting today, Slade School of Fine Art in London and Falmouth University in Cornwall are among the art colleges running the first of about 100 graduation shows in coming months, presenting the latest “hot” art produced by students.

The annual BA and MA shows are a great place to pick up a piece of original artwork that you can enjoy looking at, but which could also turn out to be a savvy financial investment. You are also supporting promising young artists for whom it is incredibly important to make their first sale as they leave college and step out into the real world.

It has never been easier to buy art. Over the past two decades a host of online sites selling contemporary art have sprung up – from small, online-only galleries to big auction houses such as Sotheby’s and Christie’s. An original piece can be snapped up for as little as £45, says Jane Eccles, who works as a programme manager for a utilities company and has amassed a personal collection of 59 pieces over the past three years.

“I work long hours and commute, and it’s really nice to get home and to be surrounded by beautiful works of art,” she says. “I enjoy researching artists, and it’s nice to support emerging artists.” Her taste has evolved over time, and she now buys pieces “that challenge me”. She stresses that she buys for pleasure rather than monetary gain and has not sold any of them – although some of the work has gone up significantly in value.

Those by painter Peter Kettle, recently voted in as a fellow for the Royal Society of Arts, has nearly tripled in value in the past four years. The piece Brecon Beacons 1 which Eccles bought in 2015 for £450 is now worth £1,200.

Start with a small piece that you fall in love with. Follow your instinct
Another artist she has bought from is the Polish Bartosz Beda, who has been short-listed for several prizes and was selected for the 2012 Catlin Art Guide as the most promising emerging artist in the UK. His work ranges from painting to installation and animation. Paintings that sold for £500 in 2011 are now valued at around £3,500.

Eccles also likes Orlanda Broom, whose smaller, lush paintings were priced at £200-£300 at her Winchester degree show in 1997 and are now worth about £7,800. Other favourites are London artist Julia Blackshaw who exclusively “portrays the female form”, and Slade postgraduate Lindsay Mapes who has done a series of paintings on transparent silk and has been selected as one of 12 artists worldwide for a US documentary called Looking for Picasso.

Eccles’s advice to would-be art buyers is: “Start with a small piece that you fall in love with. Follow your instinct. If you buy from an online gallery you can always return the work.”

Sarah Ryan, a former art teacher who set up New Blood Art in 2004 to represent emerging artists in the UK, advises buyers to look for “some sort of coherence, some kind of unique voice or recognisable style”. She adds that artists who produce “work that’s a bit jarring or uncomfortable to look at are those that go on to be something special”.

Ryan will spend the summer on the road, scouting for new talent at degree shows from Aberdeen to Aberystwyth, and has carved out a niche selling graduate art, with prices ranging anywhere from £175 up to £10,000. Delivery fees are capped at 5% of the value of the work which can be bought through interest-free loans, and returned within the first 14 days – although this doesn’t happen very often, she says.

“When I started there weren’t really any online galleries,” she recalls. “I would go to degree shows and think – ‘gosh why aren’t people buying this?’.”

But it has become a fiercely competitive market – the advent of bigger online galleries such as Saatchi Art in 2011-12 meant that Ryan had to scale back her venture, which at one stage employed two people, to once again be a one-woman business.

When visiting a degree show Ryan recommends talking to art tutors (make an appointment in advance) and suggests having a coffee with the artists themselves to try and gauge their long-term commitment.

The best work sells quickly, so turn up early. Charles Saatchi, the advertising magnate and art collector, sometimes arrives at shows before all the artwork is installed and rival dealers get there (he is famed for buying up entire graduation shows).

Investment experts say modern art is an effective hedge against inflation – returns tend to be better at times when prices in the economy are rising, which is the case now. When selling, anything under £6,000 is exempt from capital gains tax and further tax relief applies up to £15,000.

But unlike shares, bonds or property it does not produce an income and is not a very liquid asset – you need to be prepared to hold it for several years and may not be able to sell when you want.

Art investments are also unregulated, so you can’t fall back on the Financial Services Compensation Scheme if something goes wrong. Bear in mind too that there could be insurance and storage costs.

Source: The Guardian

Art as an Asset?

The NY Daily News and other news outlets are reporting that Ivanka Trump and husband Jared Kushner failed to disclose millions of dollars worth of art. Kushner's attorney stated the art is not an investment but for decorative purposes. He did state they would now disclose the value of the art collection.

The NY Daily News reports

First Daughter Ivanka Trump and her husband Jared Kushner, a real estate developer turned adviser to the President, have failed to disclose their lavish artwork collection reportedly worth millions, according to a report.

The couple owns pieces by artists like Dan Colen, Alex Da Corte, David Ostrowski and others. Unlike Ivanka and Jared, Commerce Secretary Wilbur Ross and Treasure Secretary Steve Mnuchin, have revealed their artworks, which are reported to be worth millions, too.

Kushner’s lawyer told Artnet that the couple’s artworks are not investments but for decorative purposes only.


“Mr. Kushner and Ms. Trump display their art for decorative purposes and have made only a single sale,” the lawyer said. “To avoid any doubt, however, they will report their art collection.”

Trump’s Instagram feed is filled with posts showing her expensive artwork.

One photo shows a bullet hole painting by Nate Lowman that was sold for $665,000 in 2013. In another post, Trump poses in front of her dining table with an Alex Israel painting in the background. That piece was sold for $518,000 in 2014, according to Bloomberg.

Federal employees who have artworks that amount to a worth of more than $1,000 must report them, according to the Office of Government Ethics.

“One can conclude that there is an investment purpose if there is regular activity of selling or buying pieces of artwork,” Washington ethics lawyer Robert Walker told Artnet. “A single sale does not necessarily mean that Kushner will need to disclose his art assets.”

Trump is no stranger to expressing her thoughts on art.

“Buy things you love and trust your gut,” Trump said when asked what advice she has for aspiring art collectors in a 2013 Artsy Magazine interview. “While there are certainly a few pieces we have outgrown, most of the art we own we have fallen even more in love with as we have lived with it.”

Source: The NY Daily News

Borrowing Against Art

Philly.Com published an interesting article a couple of weeks ago on art lending and the growing interest in using fine art as collateral on loans.  As professional appraisers grow their practices into other art related areas, including art advisory, knowing the current trends becomes very important. Appraisers need to be aware of the expanding intersection between finance and the fine art market, and as appraisers we are well positioned to assist clients.

For example, I am currently working with a client who loaned money to an associate and took art as collateral.  The loan is now in default and I have been contacted to determine value (yes, after the fact) and assist in a potential sale and a possible lawsuit.

Philly.Com reports

Do you own a serious piece of art or an art collection that you want to monetize in retirement?

In the low-profile, high-end world of “art lending,” you borrow against your paintings, sculptures, or other pieces from a bank or art auction house. You can keep your collection hanging in your house or in a museum and still mint money for retirement.

Art lending works like this: A private bank or other lender stakes you some money against your collection – typically up to 50 percent of the value. So, for example, a $1 million painting by a blue-chip artist could fetch a $500,000 loan, at interest rates starting at LIBOR  (London Interbank Offered Rate) plus 2 percent annually.

The art-lending business has grown exponentially with the hot auction market. Just this year, Christie’s hosted a record-setting auction in New York for the Fujita Museum collection of Chinese art, which earned about $300 million, about 10 times estimates.

According to Deloitte’s Art & Finance Report 2016, the U.S. art-secured lending market ranges from $15 billion to $19 billion, with private banks dominating and reporting a 13 percent five-year growth rate in loans.

And more collectors and auction houses are starting to view art with an eye toward an investment return: In 2016, for example, Sotheby’s bought the Mei Moses Art Indices, a database of repeat auction sales that is considered much like the Standard & Poor's 500 index for art.

Why borrow against your collection? Privacy is one terrific reason.

“When borrowing against art, investors want to leverage their collection on their walls or in museums where you’ve lent your pieces,” says Peggy Goldfarb,  a U.S. Trust private client adviser in Philadelphia who has helped clients with art-lending strategies. "Sometimes, you want to invest in a business, or have a philanthropic goal. Or perhaps you want to acquire more pieces and want the cash."

The Great Recession highlighted the value of a low-volatility asset such as art. Unlike securities, which are valued every minute, art is generally valued once a year.

In turbulent market times, “it’s a real asset that provides solace and peace of mind,” Goldfarb added.

Another reason? Discretion.

“When a client gets a mortgage, there’s a public record. Borrowing with art means the world doesn’t know you’re a borrower. It’s very discreet,” she added.

In the case of U.S. Trust, loans generate against well-known artist names.

“Sometimes, people ask to lend against their toy-soldier collection, and that doesn’t work; stamp collections don’t, either,” Goldfarb said.

On the other hand, she was willing to lend against a Stradivarius violin owned by a lawyer at a large firm. Interest rates “depend on our existing relationship with the client,” she said.

That’s the rub: Most private banks lend against art if you have big assets in their accounts already. However, there’s an expanding list of third-party lenders: Pioneered by Citibank, U.S. Trust, and Emigrant Bank, the business now includes start-ups such as Borro.com, Athena, and Art Capital Group.

U.S. Trust, a unit of Bank of America, is still the dominant player in the art-lending market. It will host an invitation-only panel discussion, “Effectively Managing a Fine Art Collection,” from 5:30 to 7:30 p.m. Wednesday, May 17, at the James A. Michener Art Museum in Doylestown. The panel will feature Evan Beard, national art services executive at U.S. Trust. For more information, contact Eric Abel at 610-567-4735 or at eric.abel@ustrust.com.

Beard said third-party art lenders do more “pure” deals based on the price of the art, but they don’t consider the broader relationships with longtime clients of the bank.

"Most of our competitors view lending against an asset like art as an accommodation for top existing clients," he said. "They’re not out there looking for collectors, whereas we know there are some very nice collectors in the Philadelphia region.”

What about downsides? There have been plenty in the art world: price manipulation, unclear commissions, conflicts of interest, and forgeries, art experts warn.

The local auction house Freeman’s in Center City is looking at the possibility of longer-term art lending as a growth area, according to Tom McCabe, who is in charge of business development there.

Sometimes, an estate has to sell an art collection. “But if you’re still living, you have more options, such as … taking out an advance” against a piece of art.

“We do some advances, since the auction process can take six months or longer," McCabe said. "It’s a service whereby Freeman’s can provide cash up-front as an advance, whereas art loans are structured as loans with terms of one to five years.”

Source: Philly.Com

Staging With Fine Art to Sell Real Estate

The Telegraph has an very interesting article on staging real estate with quality fine art to real estate agents and developers. The idea even approaches those who store art, such as gallery inventory or museums and avoid storage fees.

This should be good news for appraisers as it means more work and certainly may increase the need for qualified appraisals as the art would need to be insured.

The Telegraph reports

Have you ever browsed a gallery wishing you could take it all home? Don’t give up hope. A curator at a top London museum has suggested that works in storage should be lent to private homes rather than hidden away in a basement.

Collector Florian Wupperfeld, founder of Leading Cultural Destinations, says the idea has merit. “It might be a good way to look after works, as storage can be very costly,” he says. The tradition of lending an art collection to a museum could soon be turned on its head.

Galleries faced with astronomical rents in the couloirs of Mayfair and Belgravia find themselves ever more pinched for space, especially as the art itself is getting bigger. One dealer’s rent demand went from £75,000 to £350,000 last year, according to gallery owner John Martin.

Several gallerists have solved the problem by “outsourcing” works to developers, lending them art to dress properties while expanding their exhibition space at no cost. These free outreach spaces may be conversions of Georgian homes, new luxury developments on the Thames or any of the emerging creative districts in the capital.

Using art as part of a marketing strategy for high-end homes is widespread across the globe but in London it has reached epic proportions, as dozens of galleries and developers jump on the bandwagon.

Lending art to a developer is a virtuous circle: the gallery gets a classy extension where it can show work for free, the interior designer acquires a luxury look for little investment and the artists, though often last in line, get paid.

Furniture is even taking second place in show homes where vast canvases, glass cases housing antiques, bespoke carpets, rare prints and sculptures often dominate the scene. There is often the chance for clients, particularly those wanting a turnkey property, to buy the works, or have them thrown in.

Turning homes into mini-museums goes hand-in-hand with hard evidence that the prices of properties near important museums and galleries are soaring. The very rich, who after all sustain the estimated £43 billion art market, want art on the doorstep as well as in their home.

Some new London schemes that are not blessed with an icon like a Tate or the British Museum nearby are trying to reinvent the areas around them as new cultural hubs. Nine Elms hails itself as London’s newest cultural hub, close by is the newly christened Battersea Creative District, while a series of art events, including the suspension of a grand piano from a crane by Catherine Yass, is marking the progress of work at Television Centre in White City.

And it’s not just the high-end developers. Peabody, a housing association that is overhauling the run-down Thamesmead estate, announced a partnership with Bow Arts “to help the area become one of the capital’s newest cultural locations for artists, designers, makers and food entrepreneurs”.

This intertwining of art and property means that interior designers have started to call themselves curators, while developers such as Nick and Ben Wilson of Residence One say they have become “art dealers by default”.

Andrew Kafkaris of Bruton Street Management, which looks after prime London properties, says: “In the 18th century many great houses were built around the works of art, collected by people taking the grand tour of Europe. We are returning to that situation today, with homes being built or refurbished around art collections.”

One scheme in Marylebone was launched with an art exhibition, put on at the same time as Frieze up the road last September, with £100 million worth of artworks by Salvador Dalí, Joan Miró and Andy Warhol rivalling the total price of the property. It worked: all but one of the six apartments at Park Crescent have been sold in what is a slow market for such luxury homes.

The apartments didn’t come with the art in situ, but if a buyer expressed interest, the developer, Amazon Property, might look to gift it to them, or help secure it at a preferential rate.

Luminaire Arts in Belgravia, one of the capital’s many dealers now specialising in renting and selling art, claims that its original artworks assist clients to sell the homes. Many estate agents agree, and this is particularly true for foreign investors and overseas clients who don’t want the inconvenience of styling yet another home.

Developers and designers have responded to this desire for turnkey, fully furnished homes and many have, like the Wilson brothers, become art dealers by default. Alexander James Interiors bought a limited edition Damien Hirst butterfly print, The Souls III, to dress Barratt’s show home in Landmark Place, Tower Bridge. The print, on loan from AJI, is for sale to purchasers.

Would the Hirst print, which cost £5,500, be negotiable? It seems likely. Last year Strutt & Parker sold a house furnished with lent artworks in Eaton Square to a Middle Eastern client who insisted that he would only take it “lock, stock and barrel” even though the art was not originally for sale.

“The seller came to an arrangement and agreed, as the value of the art was minor in comparison to the £30 million price tag for the house,” says partner James Gilbert-Green.

At West Eleven’s new Clapham development, Bakery Place, it has printed a catalogue of the artworks that dress the property, and are for sale. The association between Banda Property’s 12-18 Radstock Street development and art could not be closer. At the ground level of the apartment block in Battersea’s Creative District sits JGM Gallery, which deals in Aboriginal art. The luxurious, lateral homes upstairs are filled with its artworks and a bespoke tapestry by a graduate of the nearby Royal College of Art hangs in the lobby.

It’s not only paintings and sculpture that interior designers hire: French glassmaker Lalique has lent works and Steinway, whose pianos are works of art in themselves, regularly loans out self-playing grands.

Most of the art used to dress properties is decorative or abstract. “More often than not figurative art is a no-go,” says Nick Campbell of Narcissus Interiors. Yolanda Cruz-Suarez, gallery manager at the Store Street Gallery in Bloomsbury, which lends artworks, finds large statement pieces with bold colours work best. Contemporary works of calligraphy, bird and animal paintings are also popular, according to the Art Newspaper’s editor-at-large Georgina Adam.

Far from being an afterthought, art has become an integral part of the design process, with the sheer weight and size of some works a major consideration for architects, says Joe Burns, of interior design firm Oliver Burns. “From reinforced floors to freight elevators to bear the weight of heavy paintings, the architectural fabric of the building is now carefully considered to best accommodate the needs of an aspiring art collector,” he says.

Source: The Telegraph

NY Auction Sales Total $1.6 Million

The UK's Telegraph has a good recap of the art sales from New York City earlier this month.  The total of all sales was $1.6 billion, up $500 million from 2016 May sales, but still way off the $2.74 billion record set in 2015.

The Telegraph reports

The art market clawed back another notch from the 2016 downturn after the all-important Impressionist, Modern and Contemporary sales in New York last week realised $1.6 billion (£1.23 billion). The total was $500 million more than last May, though still adrift of the record $2.74 billion set in May 2015.

As we have come to expect, the earlier period of Impressionist and Modern art came in second with $537.6 million, approximately half the amount of the post-war and contemporary sales which made $1.064 billion. Which is not to say the Impressionist sales were without substance.

Christie’s star lot was a small and rare lifetime cast bronze head of a sleeping muse by Brancusi that excited passionate interest and sold for a double-estimate record $53.4 million. It was followed by a contorted Picasso portrait of Dora Maar on the outbreak of war in 1939 which sold within estimate for $45 million. The painting cost the seller, Dimitri Mavrommatis, $29 million in 2011 and sold to a Chinese bidder – one of several lots by Picabia, Braque, Chagall, Renoir and Monet to attract Asian bidding that night.

At Sotheby’s, there were signs of nerves when their top lot, an early Egon Schiele with a $30 million estimate and no guarantee, was withdrawn by the owner at the last minute. Into the top slot went a rare 1917 abstraction by Russian revolutionary artist, Kazimir Malevich, that sold for $21 million. But otherwise the stand-out feature of the sale was sculpture.

The first lot, for instance, was an early abstract wood sculpture by Alexander Archipenko that had slipped through an auction in Maryland two years earlier for $425. Thanks to Christie’s authentication and London dealer Offer Waterman’s bidding, the buyer now saw that price rise to a lottery-scale win of $564,500.

This was followed by an emphatic record $16 million for an anthropomorphised chess piece bronze by the surrealist Max Ernst; a record $6.3 million for some elaborate library shelves by Alberto Giacometti’s designer brother, Diego; a record $4.8 million for a curvaceous Jean Arp torso; and a record $3 million for a tall, spindly Don Quixote by the French post-war artist, Germaine Richier.

Ahead of these sales it was notable how many third parties (nine) came in to offer guarantees or irrevocable bids at the last minute, lending an air of casino or racetrack gambling to the proceedings with each guarantor standing to win if the price went higher than predicted. Do these guarantors get wind that something will do well and then place their bets?

Whatever the case, Christie’s demonstrated a greater desire to win the inter-auction-house competition, furnishing 55 per cent of the pre-sale value of its main Impressionist sale with guarantees, achieving a $207 million total. Sotheby’s had only 37 per cent of its sale value under guarantee, and realised $147 million.

But the contemporary sales were always ahead. Phillips had over 70 per cent of its main $110 million sale guaranteed and duly sold the lot, achieving a record $29 million for British painter, Peter Doig, in the process.

According to auction analysts, Art Tactic, 56 per cent of the value of the three main evening sales was guaranteed, with Christie’s, which staged the most valuable sale at $488 million, correspondingly arranging the highest value of guarantees. The guarantees ensured that most top lots were sold, and that at least nine, including the record $10.5 million paid by a Chinese bidder for a self-portrait by Rudolf Stingel, sold even though there was no competition.

While there were few substantial gains made in the Impressionist sales, there were many in evidence here. A sculpture by Thomas Schutte, for example, was bought two years ago by dealer Rafael Jablonka for $1.9 million, and sold for $5.2 million, and a painting by Jean-Michel Basquiat, bought in 1989 for $341,000, sold for $25 million.

Dealers and collectors have been grooming Basquiat for superstardom for years, likening him in stature to Picasso and Warhol, and last week their efforts bore fruit when a Japanese internet billionaire, Yusaku Maezawa, paid $110 million for a massive, primitive totem-like head painting at Sotheby’s, the most ever paid for an American artist. The painting had been bought at auction in 1984 for $21,000. That’s an average 55 per cent per annum increase in price.

As ever, it is the hopes of substantial gain which drives this market. Attention is also directed at comparatively lesser-known artists like the late Blinky Palermo whose tall minimal abstract painting, Rot/Gelb, bought by Zwirner & Wirth in 1998 for $167,500, sold for a record $4.5 million dollars (a return rate of 71.5 per cent p.a).

In a similar vein, barely a handful of paintings by Japanese abstract artist Takeo Yamaguchi have appeared on the western market before, but a classic 1940s example came Sotheby’s way and it doubled the artist’s previous record selling for $950,000 - accentuating the revaluation that is taking place of post-war Asian art in general.

As the contemporary art market bounces back, it is digging into its history and global reach on a scale that earlier periods in art cannot.

Online Art Auctions

Mark Bench of Borro sent me an interesting article from the Financial Times about the rise(and at times, fall) of online art auction platforms. The article touches on the Auctionata and Paddle8, Artsy, and what Christie's and Sotheby's are doing, and mentions the Hiscox online art report. and StoryLTD.

Unfortunately, I can no longer post more than a  headline from Financial Times article (the FT contacted, and very nicely ask that I respect their republishing terms, which only allows for use of the headline and a link), so to read you will have to follow the link.

In any event, it, like so many FT articles on the art market is well worth reading, so if interested please follow the source link below.

New kids on the block: rise of the online art auction

Source: Financial Times 

A Look at Last Weeks Sales

ArtTactic takes a quick look at the NYC modern, post war and contemporary art sales. The sales totals at Sotheby's, Christie's and Phillips are up nearly 29% from the May sales of last year.

ArtTactic reports

The post-war and contemporary art evening sales in New York this week raised a total of $757,480,000* (excluding buyer’s premium), against a total pre-sale estimate of $636,390,000 to $846,890,000. The sales total between Christie’s, Sotheby’s and Phillips was up 27.9% from May 2016, and 32% above the November results last year. This result reinforces the market recovery that started during London auctions in March this year.

Christie’s kicked off the post-war and contemporary evening sales in New York with a 69 lot strong Post-War & Contemporary Art Evening Auction* on the 17th of May, which achieved $388.6 million. This was comfortably within the pre-sale estimate range of $337.7 million to $468.8 million and 12.9% above their sales total in May 2016.

On the following evening (18th of May) Phillips had their evening sale*, which achieved a total of $92 million. The sale ended up towards the lower end of the pre-sale estimate range of $87.7 million to $111 million and was up 138.9% from their May sale in 2016. Sotheby’s followed later the same evening with their Contemporary Art Evening Sale. The auction achieved a hammer total of $276.9 million, putting it above the pre-sale estimate range of $211 million to $267.1 million. Sotheby’s result was up 32.1% from May 2016.

Source: ArtTactic 

Results: Sotheby's Contemporary Art Evening Sale

I posted quickly last evening on the record breaking Basquait work selling at Sotheby's. Here is the rest of the sales information for the sale. It totaled $$319.2 million including buyer's premiums. The pre-sale estimate was $212–278.6 million.

The sale offered 50 lots, with 48 selling for a strong 96% sales rate, and it sold a very strong 97.8% by value. For the top ten, including the Basquait which had a $60 million estimate, 6 works sold for over the high estimate and the other 4 sold within the estimate ranges.

Overall the week is looking pretty good. Phillips had a good sale, selling 100% of its lots, Artnews reported "Including buyer’s premiums, its sale of 37 lots brought in $110.3 million, just about what it totaled for the same number of works at its New York sale of contemporary art last November. The result tonight more than doubled what it earned at the corresponding auction last year, when it brought in just $46.6 million on 34 lots."

It appears from some quick calculations, the week of evening sales at Christie's, Sotheby's and Phillips totaled over a $1 billion.

Boom: A Basquait Skull Sells for $110.4 Million

Bloomberg reports that a Basquiat skull portrait sold Thursday evening at Sotheby's for $110.5 million to a Japanese collector.

Bloomberg reports

Untitled work auctioned for most ever among American artists

Painting, bought for $19,000 in 1984, goes to Japan’s Maezawa

An untitled portrait by Jean Michel-Basquiat sold for $110.5 million at Sotheby’s in New York, setting a record for any American artist. The buyer was Japanese online retail magnate Yusaku Maezawa.

The colorful work was part of the auction house’s contemporary art sale Thursday evening. The bidding started at $57 million, sparking gasps in the packed salesroom, and lasted for more than 10 minutes as three parties chased after the work.

“I remember astounding the art world back in 1980s when I set an auction record for Basquiat at $99,000,” said Jeffrey Deitch, an art dealer who was the artist’s friend and champion. “All of us, Jean-Michel’s friends, we totally believed in his genius. I always thought he would be one day in the legion of Picasso, Bacon and Van Gogh. The work has that iconic quality. His appeal is real.”

The painting, which had a presale estimate of more than $60 million, was bought at auction in 1984 for $19,000 by the late collectors Jerry and Emily Spiegel.

Source: Bloomberg 

Results: Christie's Post War and Contemporary Sale

Christie's sold nearly $450, million worth of post war and contemporary art Wed evening in NYC. The sale totaled $448.1 million including buyer's premiums, and hammered $391.28 million. The pre sale estimates ranged from $366.2 million to $500.8 million, so the hammer totals just crossed above the low estimate. 71 lots were originally offered, two lots were withdrawn from the sale and three were bought in for a good for a very strong sell through rate of over 90%.

The Art Newspaper reports on the sale

Amidst fears of a lagging art market, Christie’s hammered down a solid post-war and contemporary sale Wednesday night that brought in $391,280,000 in hammer value ($448,062,000 with fees) and saw new records for Man Ray, David Salle, Robert Gober, Rudolf Stingel and Mark Grotjahn. “If we needed the proof of the strengths of the art market, we have it,” said Christie's new CEO Guillaume Cerutti at a press conference after the sale. “If we needed the proof of the strength of Christie’s, we have it. If needed the proof of the strength of our teams we have it.”

Heading into the auction, the estimates for the evening were $366.2m to $500.8m, so the total was actually closer to the low estimate, but just three of the 71 lots on offer were bought-in—discounting the two withdrawn right before the sale.

The evening’s top lot, Cy Twombly's loosey goosey Leda and the Swan (1962) saw spirited bidding on the phones, which became even more spirited after Larry Gagosian entered at $45m. “Yes Loic, I see him,” the auctioneer Jussi Pylkkänen told Loic Gouzer, who hurried to point out Gagosian from the phone bank. He snagged the work for $47m ($52.9m with fees).

It was a pleasant surprise in an evening that felt very predetermined, focused on proving the sustainability of the art market. Another was the interest in Andy Warhol’s Last Supper (1986), painted the year before the artist died, which hammered at $16.5m ($18.7m with fees), twice its high estimate, after a fight between at least five bidders, with the dealer Nicholas MacClean the underbidder. On the other hand, the sale of the Francis Bacon triptych Three Studies for a Portrait of George Dyer (1963), the first portrait of the artist’s longtime lover, actually went rather-by-the-books, with just three bidders raising the hammer price to $46m ($51.8m with fees) in three minutes.

There were even a few single bid lots in the top ten lots—the most curious of which was a $15.1m Christopher Wool that almost sold to a chandelier bid, until someone in the phone bank provided the $.1m—but after the sale attendees said they were heartened by the bidding they saw.

“You saw in the Bacon, the Twombly, the star pieces, [with a] very good depth of interest,” said Harry Blain, who founded the gallery (and later Christie’s subsidiary) Haunch of Venison. “You saw people coming in and coming to a reasonable level rather than going crazy. That’s good for the market and that's good for the artist.”

“The depth and variety of bids both in the room and from the phone banks proved that the market for special works by the most desired artists remains robust,” the advisor Benjamin Godsill concurred.

Source: The Art Newspaper 

Results: Sotheby's Impressionist and Modern Art Sale

On Tuesday evening Sotheby's held its Impressionist and Modern Art sale in NYC. The sale offered 50 lots,with a pre sale estimate of $147 million to $201.4 million and totaled $149,2 million hammer,  and $173.8 with buyer's commissions. So the sale totaled just above the low of the pre sale estimate. 37 lots sold, two were withdrawn, so the buy through rate was around 75% which is only fair. Keep in mind, Christie's on Monday night offered about the same number of lots, and brought in about $100 million over Sotheby's totals.

Given that the Christie's sale was very strong at the top, and rather average below, and now a rather average sale at Sotheby's perhaps there is a bit of cooling?

artnet news reports on the sale

Despite the last-minute withdrawal of an early Egon Schiele nude, Sotheby’s New York tallied $173.8 million on Tuesday evening at its auction of Impressionist and Modern art. Including 50 lots, the sale was estimated (minus the withdrawn lots) to come in between $147 million and $210.4 million without premium. The hammer total for Tuesday’s auction just edged past the low estimate to score $149.2 million, marginally beating the underwhelming $144 million total from the spring 2016 sale.

Dealers agreed that the withdrawn Schiele painting, created when the artist was just 19 and showing the mythical figure Danaë, didn’t sufficiently exemplify the Austrian artist’s style.

“It’s a very good painting for a Klimt, but it’s not good for a Schiele,” said Paris dealer Christian Ogier on his way out of the saleroom.

But if the house failed to drum up interest in the Schiele, the rest of the night was strong. Taking the lead was a Kazimir Malevich painting, Suprematist Composition With Plane In Projection (1915), that gave rise to a five-minute contest, finally hammering at $18.6 million to Grégoire Billault, head of contemporary art in New York, beating out North and South America chairman Lisa Dennison and Alina Davey, senior director of the private client group. Including premium, the painting sold for $21.1 million.

Source: artnet news

Christie's NY Impressionist and Modern Sale

The Art Newspaper has a good recap of Monday evenings Impressionist and Modern sale at Chistie's New York. The sale totaled $289.2 million including buyers premiums against a $207 million to $307 million total pre sale estimate. A word of caution, as three lots made for over 50% of the total showing strength at the very top of the market and less so below. There were 11 unsold lots and only a fair 78% buy through rate. It was the best performing May Impressionist and Modern sale at Christie's since 2010.

The Art Newspaper reports on the sale

Dinging the opening bell on the spring auctions in New York, the Impressionist and Modern evening sale at Christie's New York on 15 May rung up a total of $289,178,500 with fees, approaching the higher end of the pre-sale estimate ($207m-$307m)—and, the house said, its best result in the category in seven years.

Three lots made up 54% of the evening's total. The night's biggest success was Brancusi’s La muse endormie (cast by 1913, based on a marble sculpture of 1909-10), "a quest for many years" by the Christie's Paris-based specialist Anika Guntrum, the auction house's recently promoted CEO Guillaume Cerutti noted after the sale. Bidding on the bronze sculpture, estimated to fetch at least $25m, rose steadily over the course of 10 minutes to a final hammer price of $51m, or $57.4m with fees—a new record for the artist—to a buyer in the room.

Muse endormie is the first in the artist’s series of ‘egg’ sculptures, a significant step in his progression toward an abstracted sublime. Six versions in bronze exist; Brancusi considered each unique, and this was one of two that remained in private hands (others are held in the collections of the Centre Pompidou, Paris, the Metropolitan Museum of Art, New York and the Art Institute of Chicago).

Apart from a few dramatic moments during the sales of the Brancusi and a storied Picasso portrait of Dora Maar—Femme assise, robe bleue, 1939 (est $35-$50m; sold for $40m, or $45m with fees to a new client on the phone with Christie’s Asia head Rebecca Wei)—the mood in the room lacked crackle. This did not mean the electrons were not firing, in the view of New York dealer Emmanuel Di Donna, who deemed bidding "deep but considered at the top level". Aside from what he described as a "disappointing" result of $10m ($11.4m with fees, sold on a single bid) for Fernand Léger’s Nature more aux elements mécaniques, "they are prices I would expect privately for those pieces". Bidding was 42% American and 23% Asian by lot, suggesting that for all the house’s emphasis on building its Asian clientele, interest remains confined to a small number of brand names.

Bidding on Brancusi’s La muse endormie (cast by 1913, based on a marble sculpture of 1909-10), rose steadily over the course of 10 minutes to a final hammer price of $51m, or $57.4m with fees—a new record for the artist—to a buyer in the room (Photo: Courtesy Christie’s)

Wassily Kandinsky's Oben und links (1925), sold for $8.3m with fees (est $5m-$7m)

Picasso's portrait of Dora Maar, Femme assise, robe bleue (1939), sold for $45m with fees (est $35-$50m)

Georges Braque's Le Guéridon (1911), sold for $10.1m with fees (est $4m-$6m)

“It was a great night for Cubism”, said the department’s head of sale, Jessica Fertig, pointing to above estimate results for works by Georges Braque (Le Guéridon, 1911, est $4m-$6m, sold for $10.1m with fees) and a somewhat related work by Wassily Kandinsky (Oben und links, 1925, est $5m-$7m, sold for $8.3m with fees).

Material on the Modern end generally sold well, but a wide gulf opened between the top lots and the rest. The question remains: what of the non-masterpiece material not consigned as part of a package deal? Compared with the 1 March evening sale in London, which achieved 92% sell-through by lot, Christie’s New York managed just 78%, with 12 passed lots.

The contrast could not be starker than in a pair of Impressionist views of the same road in Louveciennes, one by Monet (est $4m-6m) and one by Pissarro (est $1.5m-2.5m), both circa 1870 and hailing from the same private collection. The dusky Monet nosed inside its estimate with a hammer price of $4.7m; the blue-sky Pissarro failed to sell. Many other Impressionist works struggled to breach their estimates. Is there room for material valued at under $5m in such a market? Is it wise to consign sans guarantee?

Cerutti, who manned a phone on behalf of a client during the sale of the Kandinsky in Monday night's auction, seemed to confirm the bias toward top-flight material that is fresh to the market. He noted that masterpieces and distinguished collections—here, those of the Cleveland Clinic, courtesy Mrs Sydell Miller, and Hunt Henderson—formed the two pillars of the sale. "It's still a selective market", he says. "It's more about the density of high-value lots."

Source: The Art Newspaper

Art Collecting Today

A little over a  week ago I posted on a newly published book, Art Collecting Today by former Christie's president Doug Woodhamm, click HERE to read along with a review from a Financial Times article. Fellow appraiser Rosalie Wardell sent me a post on Artsy which has a very nice excerpt from the book on how wealth and changing tastes are impacting the art market.  Follow the source link below to read the excerpt or click HERE to order from Amazon. Even if you are not interested in ordering the new book, the excerpt on Artsy is interesting to read.

Artsy reports

In his new book, “Art Collecting Today,” former Christie’s president of the Americas Doug Woodham guides the reader through the ins and outs of the modern art market: where to learn about it, what’s out there, how the market works, and how to get your start in collecting. Today’s $57 billion art market, he writes, is shaped by means and desire: an unprecedented number of people with the resources to buy art, and a growing pool of people with the education and proclivity for its appreciation. He begins by laying out the facts and figures that underpin current and future demand for art, and explains what it means for the market. The following essay is adapted from the book.

Source: Artsy 

Sotheby's Bullish on Art Prices

I am back from my trip and presentation on the current state of the antique furniture market. My presentation to a group of about 45 collectors was well received, although much of the content was not pleasing for many to hear. I also believe most were aware of the current state of the furniture market, and what I told them reinforced what they knew, but may not have wished to hear from a professional appraiser with a good presentation and content to back up the discussion. The question and answer session was active and lively.

Several appraisers contacted me stating they would be interested in my presentation and content.  I will look into a way to perhaps hold a webinar or some form of getting some of the content and findings out to fellow appraisers. Ideas are welcome.

Sotheby's recently hosted its first quarter conference call, which is typically offers little as the first quarter, outside of American week has no large fine art sales. CNBC recently reported on the conference call where Sotheby's CEO Tad Smith stated his believe the art market has not peaked and the prices can go even higher. He also believes it will be a long term or "structural" increase rather than a cyclical change.

CNBC reports

Conventional wisdom holds that the art market is highly cyclical and moves with stock markets.

But recent comments from Sotheby's CEO Tad Smith suggest that fine art prices have room to grow — and may be in for a structural (rather than cyclical) surge.

Sotheby's looked at the wealth of today's billionaires and compared it to the most expensive works of art sold. To do this, Sotheby's used the 201st richest American on the Forbes 400 to get a median wealth level. In 2006, the 201st on the list would have had to spend 10 percent of their wealth to buy the most expensive piece of art sold that year. In 2016, that same number was only around 5 percent.

In 2006, the 201st wealthiest person would have had to spend 70 percent of their fortune to buy all of the top 10 pieces of art sold at auction that year. In 2016, that same number was 40 percent.

"In other words, the median member of the Forbes 400 would have seen his personal spending power to purchase art at auction grow 75 percent in the past decade alone," Smith said.

Granted, not every billionaire collects art, and even the most avid collectors aren't likely to spend 10 percent of their wealth on a painting. And billionaire fortunes aren't that liquid — most are in the form of operating businesses rather than cash that can be handed over to Sotheby's.

Yet, the numbers counter the perception that art prices have soared beyond the reach or rationale of even the wealthiest buyers.

There are not only more billionaires in the world than ever — more than 2,000 — but their fortunes have grown far more rapidly than art prices. And that could make today's most expensive art look relatively cheap in the future.

Souce: CNBC

Traveling for a Few Days

I am traveling for the next few days and I may not be able to post. I am presenting a program on the current state of the antique furniture market to an antiques study group.

The presentation should be interesting and contains some interesting graphs and charts, trade and general media content, auction results and personal analysis.

I will post how it was received in a few days.

Upcoming Art Sales

The UKs Telegraph takes a quick look at some recent sales, many of which were modest as far as results go, and also takes a look at some of the upcoming lots for the New York contemporary sales. The upcoming sales have an estimate of around $1.3 billion, and as the Telegraph article points out, it sounds substantial but is about half of what was sold in 2015. As pointed out at the end of the article, things would be worse if the auction houses were not offering consignor guarantees. For the contemporary sales, there are 17 lots with estimates over $10 million.

The Telegraph reports

The modern and contemporary art market is under the spotlight as it reaches full throttle this month. A week of art fairs has just closed in New York. Reported sales were good, but not exceptional. At The European Fine Art Fair, TEFAF’s first outing in New York focussing on Modern art rather than Old Masters, there was a rush of sales on the first day – some of which were pre-sold, before the event opened. Among the top prices was a posthumous, 2003 polished bronze casting of Constantin Brancusi’s baby’s head, Le Nouveau Ne, which was sold by Paul Kasmin for around $4 million.

At Frieze, which opened the next day, the emphasis was less on the new than usual, appealing to a more conservative audience. One of the top sales was £1.2 million for a 1990 concave wall sculpture by Anish Kapoor. Europeans were less in evidence than hoped, said dealers, probably because European art fairs in Brussels, Cologne and Berlin had just closed and the must-attend Venice Biennale opens this week.

But before the Americans shot off to Europe for the Venice openings and to catch the prestigious Documenta exhibition in Germany and Greece, they had a chance to catch the first viewing days of New York’s major Impressionist, Modern and Contemporary art sales, for which they will have to travel back next week.

On offer is an estimated $1.3 billion (£1 billion) of art, which sounds a lot, but is half the amount realised in dollars at the equivalent New York sales in 2015. But at least the estimate suggests a market that is going at a consistent rate. The equivalent sales last May made $1.1 billion, and last November, $1.3 billion. The instabilities associated with Donald Trump’s election have made no impact; if anything, although the art world detests his anti-liberalism and threats to public arts funding, his proposed income tax reductions would find favour with wealthy art buyers.

Putting the sales under the microscope, it is clear that the pendulum of supply continues to swing in favour of post-war and contemporary art, and that is where Christie’s has exerted maximum effort to hold off rival Sotheby’s which had clawed its way back into contention for market share after several years lagging behind.

Addressing the first point, the earlier Impressionist and Modern art sales at Sotheby’s and Christie’s are reckoned to bring at least $452 million against the contemporary art sales which, including Phillips, should surpass $835 million. Nine works from the earlier category are in the $10 million plus category, led by a $35 million angst-ridden portrait by Picasso at Christie’s of his lover Dora Maar on the outbreak of the Second World War. Last time out, in 2011, this painting trebled estimates to sell for £18 million ($29 million). So did the buyer get carried away, or will they make a gain?

In the contemporary sales, by way of comparison, there are 17 $10 million-plus works. Leading the pack is an almost six-foot square portrait by Jean-Michel Basquiat which has been guaranteed by Sotheby’s with a record-busting $60 million estimate. The painting was bought by American real estate developers, Emily and Jerry Spiegel, in 1984 for about $20,000, and is being sold by their descendants. At Christie’s, another branch of the Spiegel family is selling over $100 million of art, while Frenchman Pierre Lambrail is selling a small Francis Bacon triptych for $50 million in order to buy a theatre.

Among the higher estimated lots is a 1962 painting of a Campbell’s soup can by Andy Warhol with a $25 million estimate. Coming from the Cingillioglu family of Turkish bankers, who bought it for not much less in 2010 at $23 million, it has been guaranteed by Christie’s to sell, as have half the lots in the $370 million showcase evening auction.

Based on the lower pre-sale estimates, the accumulative value of the guarantees made either directly by Christie’s or by a third party, is $207 million, or 57 per cent of the value of the sale. In spite of the Basquiat, Sotheby’s trails with just $115 million of art guaranteed, or 54 per cent of its estimated $212 million sale.

Guarantees, which are made to persuade owners to sell, are clearly a key to market dominance. Just look at the lower value Impressionist and Modern art sales where the guarantee percentage-to-value ratios sink to 28 per cent at Sotheby’s and 34.5 per cent at Christie’s.  Without them, one shudders to think how thin these sales would be. 

Source: The Telegraph

Understanding Cultural Property - 2017

Fellow appraiser Kirsten Rabe Smolensky, JD, ISA CAPP of Minerva Appraisals, LLC sent me information on the 2017 Antique Tribal Art Dealers Association symposium, Understanding Cultural Property: A Path to Healing Through Communication being held in Santa Fe on May 22, 2017. There are some great presentations and speakers, and the fee is only $35.00 which is an amazing bargain for such an important symposium.

For additional information read the block quote and click through the source link.

The ATADA reports on the symposium

Understanding Cultural Property -
A Path to Healing Through Communication

The Antique Tribal Art Dealers Association and the School for Advanced Research will present
Understanding Cultural Property: A Path to Healing Through Communication, with a full day public presentation by tribal representatives, specialized legal counsel, art professionals, museum personnel and various other interest groups.

The goal of the symposium is to inform the public about tribal values and to find positive and respectful solutions that will enhance rather than harm Southwest regional and tribal economic interests. Legislation will be covered by national legal experts, and the public will be introduced to and encouraged to participate in ATADA’s new Voluntary Returns initiative bringing privately-owned, important cultural objects directly back to the tribes.

Panelists

Tim Begay (Navajo)

Wes Cowan
Cowan’s Auctions, Inc.

Kate Fitz Gibbon
Fitz Gibbon Law, LLC

Robert Gallegos
ATADA

Kim Martindale
Antique American Indian Art Show Santa Fe

Dallin Maybee (Seneca / Arapaho)
SWAIA

Shannon Keller-O’Loughlin, Esq. (Choctaw)
Attorney

Octavius Seowtewa (Zuni)

Gregory Smith
Hobbs Straus Dean & Walker, LLP

Sam Tenakhongva (Hopi)

Brian Vallo (Acoma)
School for Advanced Research

Venue

Eldorado Hotel Ballroom
309 W. San Francisco St.
Santa Fe, NM 87501
Monday, May 22, 2017
9:00am - 4:30pm

Source: ATADA

Growth in Art Business Schools

The HuffPost recently published an interesting article on the growth of Master of Arts degrees from Sotheby's and Christie's.  The article states Sotheby's Institute which is owned by Cambridge Education Group and licenses the Sotheby's name will grant 300 Master of Arts degrees this year, compared to around 75 or 80 from 10 years ago.

I believe many of us in the appraisal profession have seen the increase of young professionals with excellent art history and art business degrees entering the appraisal profession.  Perhaps the only thing missing is experience, but many are also coming with auction specialist or gallery background. Competition of course will increase especially for choice assignments, but overall the growth and increased professionalism good for the appraising profession.

The added competition and skill sets of new appraisers should be a wake up call to many seasoned appraisal professionals. Existing appraisers should make sure they are current with educational requirements and standards, are considered qualified appraisers based upon the new 2018 AQB personal property qualification criteria, and are keeping pace with new and changing technological platforms.

In addition, existing professional appraisers should be looking to increase and expand their appraisal practices to include art related services such as brokering, art advisory, expert witness testimony, appraisal review, etc.

The HuffPost report

How can one gauge the ever-increasing reach of the art market? Perhaps, it’s the growing number of art fairs around the world or the series of new record-setting multi-million dollar prices paid at auction for works by Francis Bacon, Edvard Munch, Alberto Giacometti, Pablo Picasso, Paul Cezanne and so many others; perhaps, it is the growing scale of art thefts or how often stories about art purchases and frauds make the front page of The New York Times. All quite valid. Perhaps, however, it is also the increasing number of students looking to learn about the business of art at the schools set up by Christie’s and Sotheby’s.

“We’ll be awarding 300 Master of Arts degrees this year,” said David Levy, president of Sotheby’s Institute, which has campuses in London, New York City and Los Angeles where students learn the business of art. “Ten years ago, there were maybe 75 or 80.” The reasons for the almost four-fold increase is “the explosion in the art market. People see the art market correctly as one of the most dynamic areas of the global economy, and they want to be a part of it.”

Among what these students learn is art evaluation, which includes both connoisseurship and appraising in some specialized field, the differences between the market for one type of art and that of another, the legal and tax issues involved in the domestic and international art trade, how to market and sell artworks in galleries, at art fairs and online “and in the future. How and where will art be sold in the next 10 years?”

Students also learn some art history in the area of fine and decorative art in which they look to specialize, but their aim is not to become scholars and art historians. “When they graduate college,” Levy said, “many art history majors see their only option as getting a Master’s and then a PhD in art history, which is fine for people who want to teach art history, but not everyone does. A lot of college graduates get jobs in art galleries, but their skills don’t prepare them for the asset-driven art market, and that’s where we come in.”

While Christie’s runs its education program, Sotheby’s licenses its name to the Bethesda, Maryland-based Cambridge Education Group, which operates Sotheby’s Institute. “We are very closely associated with the auction house,” Levy said. “Their specialists teach in our program, and our students are in and out of Sotheby’s all the time.” One of the central differences between a traditional art history Master’s degree program and those offered by both Christie’s and Sotheby’s, he added, is that students aren’t just looking at pictures of artworks but go behind the scenes at the auction houses, handling the objects, talking to collectors, appraisers, museum curators, dealers, conservators, auctioneers and other people involved in the art trade.

Students at both Sotheby’s Institute and Christie’s Education generally represent a mix of recent college graduates, those who have been out of college for a number of years but who haven’t fixed on a career and others who have worked in one field for a while but want to make a change. “We have quite a few lawyers and accountants who want to try something else, refocus their skills,” said Veronique Chagnon-Burke, academic director of Christie’s Education. “The reports of record sales and huge prices for works of art have driven many of those career-changers our way.”

As one might expect, many of these students see the schools associated with the two largest art auction houses in the world as opportunities to find employment there, and “We do watch out for top talent,” Chagnon-Burke said. “Our students have mandatory internships at Christie’s and, every year, we hire some full-time. Some of our graduates get jobs at Sotheby’s, too.” However, most internships don’t turn into jobs, and Levy noted that while “a lot of people come into this program thinking they’ll get a job at Sotheby’s. They need to be disabused of that idea.”

Neither Christie’s nor Sotheby’s closely tracks what becomes of their graduates, but many of them do work in some facet of the art trade – in galleries, as art consultants, in an auction house, as art appraisers and even some artists. Levy stated that between 10 and 15 percent of the Sotheby’s Institute students have undergraduate studio art degrees. “I learned about the business side of the art world, such as how to approach a gallery from the perspective of a gallery owner, as well as the significance of art fairs and the legal side of selling your work,” said New York City painter and printmaker Madeline Aguillard, who received her Master’s from Christie’s in 2011. As an undergraduate at Vanderbilt University, she had double-majored in studio art and art history, but wasn’t so fully set on a direction that she wanted to enter either a Master of Art History or a Master of Fine Arts studio. However, “after the Christie’s program, I left with a desire to work more on my own art and apply to MFA programs.”

Source: The HuffPost