What We Learned this Week (2322)
What We Learned this Week (2322)
Sotheby's buys the Whitney Breuer Building + What Happened in Hong Kong
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In This Issue
Artelligence Podcast: David Galperin on Finding the Next Big Name
Notes: Sotheby’s buys Whitney Breuer building; Artex launches with a big Bacon; Sheffer lectures but doesn’t listen to his own advice
What Happened in Hong Kong: Christie’s Hong Kong 20/21 Sales = $158m
Artelligence Podcast
David Galperin on Finding the Next Big Name
In this podcast, David Galperin, Sotheby’s Head of Contemporary Art for the Americas talks about the success of Justin Caguiat’s work in last month’s The Now sale, the continuing success of Jadé Fadojutimi’s work and how the cycle of discovery has accelerated. Why do young artists or historically overlooked artists launch so quickly into auction sales cycles? How does the discovery market function and what’s the interplay between galleries and auction houses.
Notes
Sotheby’s Will Move to Madison Avenue: In what has been a poorly kept secret over the last few months—including Sotheby’s CEO featuring the company’s new back-office facilities in Long Island City on his his Instagram—the auction house officially announced that it will acquire the Marcel Breuer building that formerly housed the Whitney Museum and now is the temporary home of the Frick Collection. As a New York real estate play—there aren’t many buyers for a former museum space created by a mid-century starchitect—and a market positioning move (you don’t have to be a genius to get the museum-quality vibe) it all seems pretty smart. Sotheby’s has struggled for years to make sense of their somewhat inconvenient location in what was once warehouse space for the auctioneer before it was renovated in 2000 to reflect the former owner and luxury mall real estate developer’s ideas about how to break down barriers between the art world and luxury. The new galleries and saleroom will be in a more convenient location close to museum mile but still far from the city’s commercial core where its rivals are located. Bloomberg prices the acquisition at $100 million but that doesn’t include the cost of the new back offices or the separate offices Sotheby’s will have to acquire near the Whitney closer to the 2025 move-in date. The specialists and client services folks won’t be commuting between LIC and Madison Avenue. They’ll be housed somewhere nearby (to be determined closer to the move-in date but the area has exceedingly few buildings with office space for the 100 or so staff who would need to be near the Breuer building.) By far the most important part of this deal is the fact that Sotheby’s still owns 1334 York which has become a far more valuable asset either as a real estate play in the medical superblock extending South or a sale.
Stock Exchange for Art Opens with $55m Francis Bacon: The prince of Liechtenstein’s pet project, a fractional art platform called Artex, is launching with a Francis Bacon work bought at Christie’s in May 2017 for almost $52 million. Artex values the work at $55 million. Artex will sell shares in $100 units. Artex is hardly the first fractional ownership platform. The launch doesn’t explain how or why shares in individual art works would trade and how the valuation would be established by buyers and sellers. But let’s set that aside for a moment. Fractional ownership of assets relies on the idea that buyers will value a small piece of large and valuable asset at a higher level than owning the asset outright. Why? It’s hard to own really expensive assets unless you have a lot of money. On the other side of the equation, returns from the sale of art works come mostly from buying objects that are undervalued and selling them once their value becomes recognized. A $52 million Francis Bacon is not an undervalued asset by any calculation. Indeed, if the evidence of Si Newhouse’s small Bacon self-portrait is any indication, Bacon’s value has remained fairly flat for a decade and a half. The challenge for a fractionalization platform is that investors are unlikely to buy shares in undervalued artists to get the potential return. So their best hope is that the asset will become an inflation hedge which might make Artex’s shares an interesting barometer of inflation expectations.
The art world’s love language is sanctimony: This story about Adam Sheffer acting as an expert witness in one court case on the perils of fractional ownership of an art work and being cited as the unnamed victim in a filing for another case is worth noting. If you don’t want to read the article, here’s a synopsis. Sheffer submitted an affidavit that said partial owners must make efforts to retain control of the works of art they buy and otherwise register their ownership interest in the form of UCC filings. Yet, Sheffer is the unnamed victim in the lawsuit that has unravelled Lisa Schiff’s art advisory business and exposed her to serious consequences. The mystery here is whether a minor exposure was the reason Sheffer’s name was not used in the Schiff filing.
The Dial
The almost $159 million spent at Christie’s over the last weekend during four 20th and 21st Century art sales was 27% below the equivalent three sales last year. Despite the significant pullback, the sale statistics were fairly strong. The hammer ratio was a positive but hardly raging 1.13. The sell-through rate was 88% comprising 287 lots offered and 253 sold lots. Of the sold lots, 39% were bid above estimates; 40% sold within the estimates; and only 16% had to be sold at compromise prices. The average price of a lot in these sales was $628,061.
What Happened in … Hong Kong
Following so closely upon the New York sales, Christie’s Hong Kong sales cycle last weekend offered an interesting counterpoint. Not only were the estimates set to encourage bidding and that was accomplished but several global artists were able to establish solid, if not spectacular, prices. Dominated by works from Yayoi Kusama, who had a whopping 17.38% of the overall spending, Zao Wou-ki, who came in at less than half that number of 7.4%, Yoshitomo Nara (5.72%), Basquiat (5%) and Koons (4.9%), on the strength of one lot each, Nicolas Party (4.7%) and Chu Teh-Chun (4.4%), the sales reinforced the message of May—the international art market has surprising strength in the face of significant economic pressures. Throughout this Winter and Spring, sales volumes around the world have been falling at around ~30%.
Top Ten
The top lot at Christie’s was a curious Jean-Michel Basquiat that had been sold two and a half years earlier as part of a pair of similar works, acquired separately but sold together, for very strong prices. Black from 1986 made $8.1m in 2020 and $7.99m in Hong Kong last weekend. The consignor’s goals aren’t known. If it was a distress sale, the consignor got out with a haircut; if it was a flip, there was no payoff. That said, what’s more interesting about the sale isn’t the consignor’s loss but the fact that a not dissimilar work sold in the Fineberg collection two weeks earlier saw aggressive bidding. Brain from 1985 was one of the surprise bright spots in the Fineberg evening sale making $5.6 million with fees against a $3m estimate. Jeff Koons’s Celebration-series work, Sacred Heart from 2007, made estimated $7.7m. Koons’s work has dropped in value by half from its heights around the 2014 retrospective. There are several contributing causes to that fall. But a work like this has proved resilient. Works of a similar size from the series have sold for approximately the same price in 2016 and 2011. As mentioned above, Yayoi Kusama is now the centerpiece of the Asian Contemporary art auctions. The sheer volume $27.6 million and number of lots, 12, makes her the mainstay of these sales. Her average lot value was $2.3 million. The success of René Magritte’s La promenoir des amants from 1930, making $6.5m with fees above the estimates, illustrates the growing global appeal of the most-famous Surrealist. The volume of Nicolas Party sales have slowed in 2023 but the price action remains strong. Still Life from 2015 had a third-party guarantee but was still bid to $4.9m to achieve the artist’s second highest price at auction. A second work, Rocks from 2014, performed equally well even though there was another third-party guarantee on the work. A third lot, a work on paper, was bid to two times the estimate to make $385k. Avery Singer’s untitled work from 2016 made her fourth highest price at auction, five works have now sold above $4 million publicly. The $3.1 million paid for Jean-Paul Riopelle’s Saint-Anthon from 1954 is the artist’s sixth highest price. That seems noteworthy that the sale took place in Asia where abstraction remains a dominant aesthetic theme.
Most Dynamic Bidding
Aside from Kazuo Shiraga and Zao Wou-ki, two well established historical painters with mature markets, the most dynamic lots list is composed of lower value works by artists with emerging markets or continuing momentum. Caroline Walker, Izumi Kato, Atushi Kaga have all been pursued over the last year. Price pops for Indonesian artist Ahmad Sadali, Indonesian sculptor But Mochtar, historical Japanese painter Zenzaburo Kojima, Japanese abstract painter Takesada Matsutani and young Hong Kong artist Firenze Lai suggest a market looking for value in unexpected places.