Appraiser Workshops

ISA Education Foundation Business Seminar - October 8th

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Wed, 28 Sep 2022 13:47:00 +0000

If you are looking to expand the reach of your appraisal practice, this upcoming ISA Education Foundation appraisal business seminar is one not to miss. This is not a theory and methodology program, but focuses on building and expanding the professional appraisal practice. Top allied professional speakers from law firms to private client insurance reps, to auction houses, to technology specialists to refreshing your business. Plus, a roundtable with most of the seminar speakers and of course plenty of time for questions and answers from appraisers, allied professional and gatekeepers. August 8th will be here shortly, so register soon! Only $250 for the full day, including presentations, networking lunch, business round-table and question and answer sessions from top allied professions. To register: https://www.isaeducationfoundation.org/educational-seminar

Thank You

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 23 Jul 2020 22:21:00 +0000

Thanks to everyone who send me best wishes, kind thoughts and positive feedback about how important the AW Blog has been to them over the years. I am truly humbled by the response and outpouring of support, and more importantly concern over my recent surgery and recovery. Thank you so much for all of the kind words and outpouring of support.

Some of the support emails and blog readers asked if there was a way to view all of my posts over the years and how to search for the posts. For the first questions on viewing all of the posts, such as an index or table of contents, I can on the blog dashboard, but I dont think there is a way to make that public. I will look into it and see if there is a way to publish the titles of the posts. I dont think I can, but I need to look a little deeper into it.

The second questions was searching the posts specific content and information. And yes, that can easily be done, and I have had many appraisers, attorneys, art market advisors, bankers and even IRS professionals search the blog for articles and specific content.

To search the post you need to visit the blog homepage. Most viewers of the blog are through email distribution, but there is a webpage for the AW Blog and all of the posts are on it and they are searchable.

To visit, click the following link

http://appraiserworkshops.blogspot.com/

Once on the AW blog page, in the top left corner is search box. Just type in your keyword, such as Kollsman or Appraisal Foundation and posts with those keywords will appear. If you are using a general term, like appraisal, be prepared for a lot of posts, so be more specific. It searches the title and the content of my posts (mostly news articles). There is a wealth of knowledge and over ten years of appraisal related posts on the site with great past art market news and appraisal content.

Have a great weekend, and again thank you for all of your kind words and thoughts.

Update and Future Plans

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Wed, 22 Jul 2020 17:20:00 +0000

I hope everyone is doing well and staying safe. I have not posted since early May, and even prior to that I was not posting as regularly as I like or have done in the past.

First, things slowed down with isolation, shut downs and social distancing, and with that I thought a good time for a bit of a break. I probably had more time to post, but found little of interest and with the change in routine focuses on other opportunities and interests.

Then, on May 10th I had unexpected quadruple bypass surgery. I bit of a shock, but all is well and the recovery has gone better than expected. That certainly slowed me a down as well, while it also makes you reassess your priorities as well as lifestyles.

We look at the discovery and surgery as a blessing as the blockages were caught before any major medical events, such as a heart attack. The good news, according to the cardiologist is my heart is in very good condition and did not sustain any damage.

With that, I am now getting back to work with some interesting appraisal assignments, and I am please about that as too many days have run together over the past few months. My plans for the Appraiser Worskshops blog are still forming or re-forming. I hope to continue to post, but will probably reduce the number of posts and only post when something major happens or something with a high level interest to the personal property appraisal community, or something that interests me and I wish to share. Additionally I am working with the ISA Conference Planning Committee for the 2021 Assets Annual Conference which if all goes well will be held in Washington DC in March of 2021. We have some exciting things planned and a lot of great programs.

I have been posting for over 10 years now, and have over 4,000 posts, mostly dealing with appraising and the fine and decorative arts markets.

So stay safe and look for my posts in the future.

Best,

Todd

Art Collectors Looking for Liquidity During Covid-19

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 16 Apr 2020 12:56:00 +0000

I hope everyone has been well as we adjust to social distancing and isolation during the Covid-19 threat. My family and I have been well, staying mostly at home and doing some appraisal work and trying to stay busy as the days pass. From other appraisers I have spoken with business is very slow, and I am seeing the same thing. Hopefully when the economy is opened and restrictions are slowly lifted life and our appraisal practices will start to get back to normal.

I have not been posting much, as it seemed to be a good time for another break, but I spotted this interesting article from Business Insider on how wealthy collectors are using their assets during the Covid-19 outbreak.

Everyone, please stay safe and well.

Business Insider reports

Some wealthy art collectors are raising cash from their art assets amid the looming recession.

Investing in art has long been popular among the wealthy because the category is considered a “value-preserving asset class” that has a lower call risk than assets that are priced daily, such as securities.

“As equities tumbled and then, as concern and the consequences of the pandemic started to become apparent, some clients [are] looking for fast capital to meet capital/margin calls on their investment portfolios,” Freya Stewart, CEO of Fine

Some wealthy people are looking at using their art assets as collateral to obtain hard cash amid the coronavirus pandemic, Business Insider has found, based on interviews with multiple sources in the art world.

Elizabeth von Habsburg, managing director of Winston Art Group in New York, told Business Insider that people are looking to raise money from their art due to a mixture of “economic disruption and lowered interest rates” in the financial markets, giving clients “the opportunity to undertake, or add to, their loans collateralized by art.”

Athena Art Finance in New York told Business Insider that the company was in “active discussions” with various art collectors and investors looking for liquidity, while London-based Fine Art Group said it has also seen an uptick in inquiries for financing against high art and jewelry this past month.

Fine Art Group CEO Freya Stewart told Business Insider the uptick is because “cash is king” – especially in “times of volatility and uncertainty.”

Experts say the US is headed toward a recession brought on by the coronavirus pandemic. In the past three weeks, more than 16.5 million Americans have lost their jobs.

“As equities tumbled and then, as concern and the consequences of the pandemic started to become apparent, some clients were looking for fast capital to meet capital/margin calls on their investment portfolios,” Stewart said. “Others simply want to secure capital now to ensure they are financially well positioned over the coming months and beyond.”

To be sure, there is evidence of that this activity is having a counter effect: wealthy people, collectors, and galleries sensing an opportunity and buying more art than before. Bloomberg’s Katya Kazakina and Tom Metcalf reported that wealthy people have been buying art at massive rates to shift their stock into “real assets.”

Art financing has long been popular with investors, because art is seen as a “value-preserving asset class,” as noted by Deloitte’s 2019 Art & Finance report. Artwork in general isn’t necessarily impacted by the risks commonly associated with the financial market, which makes it a lower call risk as an investment, Kazakina and Metcalf reported.

For example, it took the S&P 500 five years to recover from the 2008 recession, while it took the Artnet Index for the Top 100 Artists only three years. During the 2015 and 2016 market sell-offs, though both the S&P and Artnet Index took a hit, Deloitte found that, when broken down by price bracket, high end works of art worth at least $1 million were able to lead a comeback in some art categories.

Since art is regarded as being a luxury item, it often rebounds and grows faster than traditional assets do. This is especially true for blue chip artists such as Picasso, Dali, Pollock and Warhol, whose works have been proven to hold value over time, even during economic crises.

“Over the past 10 years, art has become recognized as an acceptable asset class for banks to lend against,” Scott Lynn, founder of the art investment company Masterworks, told Business Insider. “We estimate that there is more than $10 billion in leverage secured by major art collections. Most art loans begin at $10 million and exceed $1 billion in collateral value.”

As a recession looms, the art world waits to see what’s next
Interest rates for art lending have fallen dramatically over the past few years, attracting more companies and art collectors that are looking to secure loans. In fact, von Habsburg said that last year alone, Winston Art Group appraised more than $3 billion worth of art to be used as collateralized loans.

“The benefits now as in the past are many – it is a way to make that asset class work as a financial tool; it is an alternate source of liquidity in a normally rather illiquid asset,” she said. “For those collectors or dealers who have large stocks of stored art that is not being hung or transacted, that art generates funds rather than sits as a static asset; and the art can be held and hung on collectors’ walls even while being used as collateral.”

Art shows, fairs, and private and public auctions have been canceled amid the coronavirus pandemic. Museums around the world, such as the Louvre and the Met, have also closed, as have the galas usually thrown to help raise money for them.

Art shows, fairs, and private and public auctions have been canceled amid the coronavirus pandemic. Museums around the world, such as the Louvre and the Met, have also closed, as have the galas usually thrown to help raise money for them. Getty Images
But there could be a negative side to using art as collateral, she said, which could become more apparent over the next few months. Especially because this season’s art shows and auctions have been postponed, while private sales have started to slow down.

“The current situation, it is not just a financial crisis. It is also a crisis of the health of so many people worldwide,” she continued. “I would imagine that the art market will be slower to recover than after the 2008 financial crisis, as galleries go out of business, leaving many artists without gallery representation, auction houses retrench, furloughing wide swaths of specialists across lower revenue areas of the market, and sales remain ‘virtual’ for longer periods of time.”

Meanwhile, as a recession continues to threaten the global economy, von Habsburg predicted that some art portfolios, such as contemporary or modern art, might need additional collateral to “maintain their ratios of loan to value.” But, she said, this could prove difficult for those who do not have excess work to place into the portfolio.

“Works may have to be sold to cover the debt, and the market has a sharp nose for works being sold under duress, which can lead to lower than normal financial results,” according to von Habsburg.

Cynthia Sachs, chief investment officer of Athena Art Finance, somewhat agreed with von Habsburg.

“Art collectors are waiting until the public part of the market opens to sell their art, while art investors are using this time to find interesting stressed opportunities,” Sachs told Business Insider. “This global pandemic is clearly a new paradigm for all asset classes. We don’t have any precedent or foresight in our recent history to understand the true long-term effects of such a crisis on the art market.”

Source: Business Insider

PERSONAL PROPERTY INSPECTIONS

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 26 Mar 2020 20:47:00 +0000

Personal Inspections during a National Health Emergency from the Appraisal Foundation

Question: Do personal property appraisers need to perform personal inspections during a national health or other emergency?

Response:Appraisers and users of appraisal services should remember that USPAP does not require an inspection unless necessary to produce credible assignment results. (Please refer to USPAP Standards Rules 7-2 and 8-2 and Advisory Opinion 2 for further guidance.) When a personal inspection would customarily be part of the scope of work, a health or other emergency condition may require an appraiser to make an extraordinary assumption about the identification, relative quality, etc. of the subject property. This is permitted by USPAP as long as the appraiser has a reasonable basis for the extraordinary assumption, as long as its use still results in a credible analysis, and as long as the appraiser complies with the reporting requirements in Standards Rule 8-2(a)(xiii) or (b)(xv).Thus, if appraisers rely on photographs, purchase receipts, inventories, maintenance logs, etc. to identify the subject property, they must reasonably believe the sources are reliable.

Appraisers must also reasonably believe the sources areadequate for identifying the other characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, as specified in Standards Rule 7-2(e)(i-vi).

Personal property appraisers are cautioned to use great care in the use of an extraordinary assumption in lieu of a personal inspection. It may not be possible to identify relevant characteristics of some assets or to perform certain assignments without actually performing a personal inspection of the subject property. Some examples include, but are not limited to, when the scope of work makes it necessary for the appraiser to: determine whether the subject is a painting or a giclée print on canvas; obtain technical information about a diamond; ascertain a property’s current condition; or confirm its very existence. In these cases, the appraiser cannot provide a credible appraisal without conducting a personal inspection.

Source: The Appraisal Foundation

Coronavirus

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 15 Mar 2020 23:02:00 +0000

If you are like me, you are probably getting all sorts of notices of auction house restrictions and closings. Christis's and Phillips have announced closing and postponements.

Many other businesses are now having employees work remotely, and many school systems have temporarily closed. I would assume it will have an impact on our appraisal practices as well. ISA Annual conference is scheduled for late April, and ISA leadership, from what I understand is working with partners to weigh all available options, which of course could include cancellation. AAA has suspened all of its in-person programs and is looking to add more online options.

The Artnewspaper reports

Auction house has closed New York saleroom along with other offices—Sotheby's has not as yet announced any closures while Phillips has postponed all events and sales until mid-May

14 March: Phillips announced that it will postpone all sales and events globally until mid-May

Christie's is shutting almost all of its locations in the US and Europe, including New York, until further notice and postponing March and April sales due to the spread of coronavirus (Covid-19).

Phillips has also postponed all sales and events internationally until mid-May and closed its offices across the US and Europe.

In a statement released last night, Christie's says the decision is to protect the "health and well-being of our employees and our clients". Guillaume Cerutti, Christie's chief executive officer, says: “In the days ahead, we will be communicating a number of necessary changes to our usual course of business, including further changes to our sale calendar. These decisions are undertaken with a great degree of care and in close consultation with our clients.”

As of Monday, 16 March, as a precautionary measure Christie's flagship New York premises will be closed along with its offices in Brussels, Buenos Aires, Chicago, Dallas, Dubai, Düsseldorf, Hamburg, Houston, Los Angeles, Madrid, Mexico City, Miami, Milan, Monaco, Moscow, Munich, Rome, San Francisco, Santiago, Sao Paulo, Stuttgart, Tel Aviv, Toronto, Vienna and Zurich.

Christie’s King Street in London will, however, remain open, although the business is "reviewing the situation on a daily basis." The Amsterdam, Geneva and Paris offices remain open but with a reduced number of staff.

All but two sales—Prints & Multiples (18 March) and Chieveley House, Berkshire and Five Private Collections (19 March) in London—in March and April will be postponed for now (new dates will be released in the coming days, the firm says).

However, with the major May New York sales looming, the statement hints that more sales might be affected as Christie’s is "working through a restructuring of its forthcoming auctions, including significant changes to the sales calendar in the Americas and Europe."

The following auctions will be postponed—no new dates are announced as yet, the original sale dates are shown in brackets.

In New York: A Lasting Engagement: The Jane and Kito de Boer Collection (18 March); South Asian Modern and Contemporary Art (18 March); Contemporary Art Asia Online (19-26 March); Photographs (31 March); Dalva Brothers: Parisian Taste In New York (2 April) and Prints and Multiples (15-16 April).

In Paris: Dessins Anciens et du XIXème siècle (25 March); Oeuvres Modernes sur Papier (26 March); Hommage à Arp – La collection Greta Stroeh (26 March); Art Impressionniste et Moderne (27 March); Livres Rares et Manuscrits (7 April); Art Précolombien (7 April); Arts D’afrique, D’océanie et D’Amérique Du Nord (8 April); Collection Delanoue (28 April) and The Collector: Le Goût Français (29 April).

Meanwhile, Sotheby's also released a coronavirus statement from its chief executive Charles F. Stewart last night as a reassurance to clients, but did not announce any closures as yet. Stewart says: "So far, we have been able to conduct auctions and offer the full range services to our clients, despite modifications as appropriate in certain instances. While we cannot predict the future, we wanted to let you, our valued clients, know how we are addressing the epidemic and what you can expect from us in the near future."

Stewart says that the firm will follow "the advice of local government officials and health authorities and, where appropriate, have colleagues working remotely" and adds that Sotheby's "galleries in New York and London are open this weekend" with sale views open to the public.

Source: The Art Newspaper

Strength Reported in the Dec Arts

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Tue, 10 Mar 2020 19:44:00 +0000

The Financial Times recently posted an interesting article on strength in the decorative arts market. I have only posted a small portion of it here, as the FT limits what I can post. If interested in the full article, follow the source link below. The article does a good job at defining the differences between collecting fine art vs the decorative art, and the barriers to entry on quality pieces are lower.

The FT reports

And it is not just new design; the antique and collectibles market is stronger than ever. Estimate-busting 20th-century pieces by Jean-Michel Frank, Charlotte Perriand and René Lalique achieved world-record prices at Sotheby’s auctions last year. Its design auctions fetched more than $190m globally. Bonhams tells a similar story, with strong sales in North America.

Collecting design is nothing like collecting paintings or sculpture, or even conceptual art. For a start, taking a chance on a new designer or two is unlikely to make a patron rich.

But the fact that it is cheaper to start a collection makes design less risky and, in turn, more accessible — and fun. As New York gallerist Zesty Meyers puts it: “Compared to the fine art world, design is like a penny candy store.”

Compared to the fine art world, design is like a penny candy store

New York gallerist Zesty Meyers
He is right: there are many more actual things in the world to collect. Furniture and functional objects — particularly when manufactured rather than crafted — are easier to come by than paintings.

Source: The Financial Times

Working with Millennials

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 08 Mar 2020 18:36:00 +0000

I just posted an article sent to me by Rosalie Wardell on how rug dealers are developing sales strategies on selling rugs to millennials. Now, an article from Wealth Management on millennial growth and interesting in passion investments and collecting. The article notes that more tan previous generations, millennial collectors are interested in more than just the passion of collecting, they too wish to see a return on their collecting. With that, appraisers and art advisors should soon start to see more business coming from the millennial generation.

Wealth Management reports

The millennial demographic is finally starting to pay off student loans, buy houses and save money. They’re accumulating wealth and depending on advisors to help them invest, but in typical millennial fashion, their interest goes beyond the standard stocks, bonds and other investment instruments that advisors generally recommend. Fine art is a commodity that appeals to the demographic, so advisors need to be able to help explain how it can be a financial asset and wealth-building strategy—and not just something to decorate the walls of the homes they’re finally able to buy!

Art has never been more accessible. Social apps like Instagram allow millennials to interact and communicate with artists and galleries, providing access like never before. Millennials were also introduced to art from an early age through brand partnerships. Famously, sneaker companies have collaborated with artists to produce custom shoes and unique colorways inspired by the artist’s style. In 2019, renowned British artist Damien Hirst worked with Vans to apply his favorite motifs to some of their most popular styles, while Nike’s collaboration with Netherlands-born Piet Parra led to one of their most popular sneaker releases to date. Brand collaboration goes beyond sneakers, as the world-famous Jean-Michel Basquiat’s art-inspired makeup line is among the most popular for well-known brand Urban Decay. For advisors working with millennial clients, it’s important to realize that art was an entrenched part of their culture growing up, and not necessarily some highfalutin collectable for the rich and famous.

More than ever, art is permeating consumer goods and pop culture, which created a low barrier of entry for the millennial demographic to gain interest. Now that they’ve started to accumulate wealth, they’re seeking out advisors who can help them conduct due diligence and learn about investing in art. There are reasons for advisors to take this sector very seriously, as millennials often identify the following as selling points:

Time—Generally, millennials are the youngest demographic to be able to accumulate the means to invest in art, which makes it an attractive asset class because they have the opportunity to let it appreciate over time. When advising, it's crucial for them to understand that art is a commodity whose value grows slowly, taking years or even decades. Because millennials are so young, they have the ability to see the complete cycle when it comes to an artist's rise in reputation over time. They don’t need to be investing in the Monets or Picassos of the world but, instead, can look for burgeoning artists that pique their interest and appeal to their taste. As their advisor, it’s important they realize that because of their youth, they’re uniquely positioned to let the artwork and artist appreciate over time.

Unparalleled access—Beyond visually focused social media like Instagram, the internet has made the art world more accessible than ever. Aside from being able to connect directly with galleries and artists, online marketplaces have also seen a rise in popularity, providing the “Google everything” generation with means to purchase fine art in a familiar, comfortable way—using the mobile devices they love so much. The art industry has been slow to adopt the e-commerce revolution, but millennials are more likely to buy fine art online than any other demographic, and the industry is starting to appeal to their state of mind. The internet can be a modern-day Wild West, so if clients are considering purchasing art online, investors need to do their part and help them vet the opportunity. Are they buying directly from a gallery? What is the overall earning potential for the piece? The internet provides access to art from across the world, but it’s the investor's job to ensure that clients are purchasing art that will actually accrue value over time.

Beyond just an investment—Unlike stocks and bonds, art also doubles as a hobby for millennials, and advisors can help young investors most in their research phase. Introduce them to the Sotheby's Mei Moses Indices and help them understand why it's the preeminent measure for the art market. Make sure they know how art is valued and what qualities drive value. While previous generations may have been more willing to allow advisors to handle their wealth as they see fit, millennials want to be involved. They want to be active and have a full understanding of how they’re diversifying their money, and the art world allows them to have a more hands-on approach. Whether it's communicating with an artist through an online art buying platform or arranging to see artwork in person through a gallery, investing in art allows millennials to be more involved with their investments.

More than with previous generations, art represents an investable asset class to millennials. Still scarred from the 2008 recession, they believe this physical asset will let them accrue wealth over time, while also giving them something nice to look at—and share on Instagram! The internet's ability to make almost everything feel accessible, combined with the art world introducing itself to millennials from an early age through brand partnerships and pop culture references, has made it an ideal market for the demographic. As this generation and the ones following it accrue wealth, advisors must know how to answer their questions and counsel them.

Source: Wealth Management

The Antique Rug Market

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Wed, 04 Mar 2020 17:50:00 +0000

Fellow appraiser Rosalie Wardell send me an interesting article from Architectural Digest on the antique rug market and how the current generation of rug dealers are marketing their rugs to millennials and other collectors. The article also interestingly notes current rugs being sold have classical elements, some patina which brings softness to a room yet will also blend into contemporary interior designs.

Architectural Digest reports

Zach Zaman is a second-generation rug dealer. He grew up tagging along with his father all over New York state to visit auction houses, eccentric dealers, and the homes of collectors. "Looking back on my earliest and most vivid memories, I don't recall individual rugs as much I remember the people I met," says Zaman, 32. He remembers how his father would share backstories about the antiques as well as the families who had owned them, a trait that Zaman values to this day. It's also one that he has carried over to his own business, Heirloom Rugs.

Still, Heirloom Rugs is worlds away from the stuffy rug shops and old-fashioned dealers Zaman grew up with. His light-filled showroom in Williamsburg, Brooklyn, is replete with vibrant 100-year-old carpets from western Asia and northern Europe, artfully draped among hanging plants and global furnishings. The photos Zaman posts in his Instagram feed (tagline:#rugsarearttoo) are lovingly curated and include chatty, emoji-filled captions. A recent post showcasing a sunburst-patterned Scandinavian rug read, “Swipe for a bit more info about this piece + a peek into Viking influence on global trade.”

Considering that for many years information and access to rugs were safeguarded and controlled by a tight-knit network of ultra-competitive businesses, this open and casual approach feels fresh. Indeed, for decades, beautiful antique rugs were mostly viewed as a rich person's game. The hand-knotted and ornately detailed wares came with six-figure and higher price tags, becoming synonymous with posh Upper East Side apartments and giant houses in the Hamptons. However, much has changed within the past few years. The world of antique rug dealing has moved from specialty boutiques and estate sales onto the Internet. It's become more colorful and more accessible, and now skews to a younger, more visually driven crowd. The majority of the rugs that Heirloom Rugs sells, for instance, falls within the $500 to $3,000 price range.

“For many, this category is an enigma,” Zaman observes. “Everything we do is to try to be inviting, inclusive, and make our rugs approachable.”

According to Jacqueline Coulter, a senior specialist consultant at Sotheby's rug department, where she has worked since 1985, "We've started to see these types of traditional rugs come back into fashion because they soften the space and are nice to live with." New methods for selling antique rugs have only boosted their popularity, especially as a return to traditionalism has fueled a renewed appreciation for all things timeworn. Patina is no longer seen as a flaw.

And while previous decades were dominated by the Persian rug, the gold standard of antique carpets, more affordable styles have risen to the fore. Moroccan, Navajo, Turkish, or Tibetan styles offer similar aesthetics at a fraction of the price. “People are using very traditional rugs in a sort of ironic way,” says Coulter, referring to the juxtaposition of older floor coverings with sleek modern furnishings. Many of the rugs sold by younger dealers seem to fall within this space: classic pieces that will still appeal to a contemporary-minded crowd.

"I think minimalism is really boring," adds Mikael Kennedy, a 40-year-old Los Angeles–based photographer who started dealing rugs on Instagram in 2013. Kennedy's personal affinity for maximalist-bent decor style is plain to see: He artfully arranges and layers rugs in his home and studio, pairing patterns and colors with little restraint. For him, it was a passion that grew into a hobby that eventually turned into a business. He tells me he first fell in love with vintage Persian rugs on set when working as a photographer for Ralph Lauren in New York. Today, Kennedy’s customer base includes streetwear designers, fashion insiders, and other creatives. "I sometimes feel like I'm just the bridge to a younger generation of appreciators," he says. "They're mostly fashion-and-art-driven because that is my world."

Smaller, new-wave dealers inlcuding Zaman, Kennedy, and fellow e-tailers like Frances Loom, Kaya Kilims, and the online startup Revival Rugs rely on a more fluid, nimble business model than the old guard. Kennedy sells exclusively online and relies heavily on Instagram to drive sales. While Heirloom Rugs has its Brooklyn brick-and-mortar location, Zaman says that he’s seen a noticeable spike in online sales compared to previous years. He also augments his business with rentals and commercial supply. Heirloom Rugs have been featured on television shows such as Netflix’s Russian Doll and are used almost exclusively in the fashion label Rag & Bone’s flagship stores.

Digitally savvy businesses such as Zaman’s and Kennedy’s are uniquely suited to the evolving needs of the design profession. "It's a much faster-paced service than traditional trade outlets. The savvier the dealer, the quicker the product moves, which means that I see more new things," says Darren Jett of the AD100 interior design firm Ash NYC.

But just as customers are turning to these new dealers for visual impact, price, and convenience, they’re going for a good story too. "I want to know what eras and styles influenced this rug and what styles this rug later influenced,” Jett continues. “I find that clients love knowing design history."

Recently Kennedy flooded Instagram with photos from a recent trip to Morocco, giving customers an unfiltered look at how he searches for rugs. Zaman posts “weekly picks” on the Heirloom website and Instagram like clockwork, highlighting the most compelling pieces that he and his team have just picked up. It’s a refreshing counterpoint to the old way of doing business. To Kennedy, stumbling upon a unique find is akin to an encounter with a work of modern art: “They are essentially paintings that you walk on."

Source: Architectural Digest

Marron Collection Update

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Mon, 02 Mar 2020 21:19:00 +0000

artnet news is reporting that the trio of art galleries selling the Marron collection have, in about a week have hit $300 million in sales. The artnet news reports notes that auction house estimates were in the $300-$330 million for the collection. It looks like, in a more controlled retail setting the collection is doing very well. This might mean more opportunities for gallery sales in liquidating collections. As noted in a previous post, but with that comes less transparency.

artnet news reports

Sales from the storied collection of late philanthropist and finance titan Donald Marron were expected to be robust, following last week’s announcement that a trio of powerhouse New York galleries—Pace, Gagosian, and Acquavella—are handling the collection privately, rather than it being sent to the auction block. But the rate of sales in less than a week has already been nothing short of astonishing.

While a marquee auction would have brought its own fanfare and extreme marketing efforts, the family and consulting fiduciaries went with an unprecedented joint-gallery option, and secured a guarantee that sources said was above Christie’s and Sotheby’s pitches. (Numbers of between $300 million and $330 million were floated by the auction houses, according to sources.)

The unconventional choice seems to have paid off. Sales appear to be happening at a fast and furious pace ahead of a May exhibition planned across Pace and Gagosian’s gallery spaces in Chelsea. Earlier this week, on February 24, the Wall Street Journal‘s Kelly Crow reported that casino mogul (and accused sexual harasser) Steve Wynn had shelled out $105 million for two Picasso works from the Marron collection. Woman with Beret and Collar (1937), a portrait of the artist’s mistress Dora Maar, and a later, 1962 portrait of his wife Jacqueline, Seated Woman (Jacqueline), were considered “gems” of the collection, according to the WSJ.

Meanwhile, new reporting today from Katya Kazakina in Bloomberg brings the total reported sales from the collection to $300 million. (All of the galleries declined to comment.) Among sales to date are Mark Rothko’s No. 22 (reds) (1957), which sold for $70 million; paintings by Cy Twombly, Mark Bradford, and Gerhard Richter also found buyers.

An Asian buyer acquired a Bradford painting for $6 million, while a Richter abstract bearing a price tag of $14 million reportedly sold as well.

Last week when the news was announced, a Pace Gallery representative told Artnet News that all of the roughly 300 works are expected to be sold by the time the May exhibition in Chelsea opens.

Source: artnet news

Fine Art and Borrowing

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 01 Mar 2020 20:10:00 +0000

The definition of Financial Leverage from Investopedia Leverage results from using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.

Bloomberg ran an interesting article a few weeks back on building art collections using debt, and focuses on the growing collection of hedge fund manager Daniel Sundheim using leverage as a technique to acquire important works. With low interest rates, and loan to value ratios typicaly at 50% the risk appears minimal to both lender and borrower.

Bloomberg reports

A $28 million Warhol. A $35 million Basquiat. A $70 million Twombly.

Hedge-fund manager Daniel Sundheim has acquired all these works — and more — while wielding one of the most powerful tools in finance: leverage.

Time was, art aficionados rarely talked openly about borrowing money against their paintings to build collections, make investments or just pay the bills.

But Sundheim, 42, is part of a new breed of collectors who are eagerly pledging artworks in exchange for lines of credit and, in the process, leveraging the $67 billion art market as never before.

In a few short years, Sundheim has emerged as a major trophy hunter, gaining entry to the board of the Museum of Modern Art alongside New York’s elite. As he built his collection, he pledged the top works against a credit line from JPMorgan Chase & Co., according to regulatory filings with the New York Department of State.

As of April, his collateral pool included 29 artworks, valued at an estimated $300 million based mainly on public prices paid, according to Beverly Schreiber Jacoby, president of BSJ Fine Art, a New York-based consulting firm with 30 years of experience with borrowers and lenders.

Like corporations and consumers, many top-end art collectors have been borrowing like crazy given this era’s ultra-low interest rates. Art-secured loans have jumped 40% since 2016, to at least $21 billion globally, according to Art & Finance Report 2019 by Deloitte.

Sundheim is hardly the only Wall Streeter to get in on the action. Money managers Steve Cohen and Michael Steinhardt also have pledged art as collateral against cheap credit lines, according to the regulatory filings.

“The collector base tends to come from credit-savvy, market-driven industries: private equity, hedge funds, tech, big data,” said Evan Beard, art-services executive at Bank of America Corp. “They built their companies using debt, and now they apply the same methodology to building art collections.”

Art bankers are happy to oblige. Often these specialists are part of broader wealth-management teams that target the very rich. Banks use the client’s total assets to determine the credit line and typically lend as much as 50% of the collateral value. They also allow billionaires to keep their art and offer 1% interest loans to a select few. For the rest, boutique lenders offer quicker turnaround and charge higher rates.

Some collectors are looking for arbitrage opportunities: They use art-backed loans to make other types of investments, including real estate, hoping to generate fatter returns. And some want access to dry powder on short notice to purchase another artwork or even a stake in a sports team.

“It’s exactly the same as why people have a mortgage against their house,” said Freya Stewart, who heads financial services at The Fine Art Group, an art adviser and boutique lender. “They are not necessarily buying another house. They are using the money to do something else.”

A spokesman for Sundheim declined to discuss the size of the credit facility backed by his art or how he uses the funds, but a person familiar with his thinking said he keeps the collateral as a working-capital line.

His collateral pool has grown 10-fold from about $30 million in 2013, according to appraisers who reviewed the list of art that backs his line. The pieces include Cy Twombly’s signature blackboard canvas “Untitled (New York City)” and “Leda and the Swan” as well as Andy Warhol’s “Most Wanted Men No. 11, John Joseph H, Jr.,” which fetched a total of more than $150 million at Christie’s and Sotheby’s auctions.

Sundheim started buying art around 2010 and opened his credit line with JPMorgan in 2013. He works with art adviser Sandy Heller, whose other clients have included Cohen and the Russian tycoons Roman Abramovich and Dmitry Rybolovlev.

The filings suggest Sundheim has become an active player at the top end of the art market, trading out of lesser works to make more significant blue-chip purchases. He owns a 1977 Willem de Kooning “Untitled XXXI,” which he bought for $21.2 million at Christie’s in 2014. The following year, he pledged a group of seven works to Sotheby’s to pay for Twombly’s “Untitled (New York City),” which sold for $70.5 million.

His Basquiats include “Dustheads” (1982), which he bought in 2016 at a steep discount from the price paid by Malaysian fugitive Jho Low three years earlier. Sundheim also owns a 1981 Basquiat self-portrait as a warrior king, brandishing a sword. That piece fetched $34.9 million in 2014, and Sundheim later purchased it in a private transaction.

The money manager has slowed his acquisitions since the launch of his hedge fund, D1 Capital Partners, in July 2018, according to a person familiar with his activities. The fund more than tripled in size since the launch to $9.3 billion in November, a rare blockbuster debut at a challenging time for the industry.

Still, Sundheim has jumped on some opportunities. In the fall of 2018, he picked up a drawing by Basquiat for $4.6 million at Phillips and a new Mark Grotjahn canvas from the artist’s solo show at Gagosian Gallery, where prices ranged from $3 million to $5 million. The two works were among 11 new pieces of collateral backing Sundheim’s credit line with JPMorgan, according to the latest filing in April.

Getting access to cheap money has become so popular that even old-school collectors are jumping into the fray.

Suzanne Gyorgy, head of art advisory and finance at Citi Private Bank, said a client who long opposed using art for collateral recently raised the subject.

“Why now?” Gyorgy recalled asking.

The client’s answer: “I’m at a dinner party with my friends — everyone has it but me.”

Source: Bloomberg

Artprice 2019 Annual Art Market Report

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 27 Feb 2020 23:09:00 +0000

The 2019 Artprice Annual Art Market Report is out, and according to a review by Yahoo the market shows growth in transactions and confidence. The report contains a lot of good information for art market trends and analysis for appraisal reports.

Yahoo reports with links to the full report

PARIS, Feb. 21, 2020 /PRNewswire/ -- Artprice by Artmarket's 2019 Annual Art Market Report shows continued growth with a all-time record number of transactions based on global confidence in the market, and the French market was particularly strong in 2019.

Fruit of the alliance between Artprice by Artmarket.com, world leader in Art Market information (founded and directed by thierry Ehrmann), and Artron, its powerful Chinese institutional partner (directed by Wan Jie), our 22nd Annual Art Market Report allows a global view of public Fine Art sales of paintings, sculptures, drawings, photography, prints and installations from 1 January 2019 to 31 December 2019.

thierry Ehrmann: "Today's Art Market is exceptionally mature, capable of withstanding political instabilities, as both London and Hong Kong's results have shown. China, which hardly existed on the global Art Market in 2000, now generates almost a third of its total value."

22nd Annual Report by Artprice by Artmarket

This report contains the famous Artprice ranking of the Top 500 best-selling artists on the global fine art auction market and the Top 100 auction results. It also contains an analysis of the global Art Market from a geographical perspective (by country and by major city), a breakdown by historical periods and by artistic media, a selection of crucial Artprice market indices and 8 key chapters providing an uncompromising analysis of today's global Art Market. No other entity is currently capable of generating such high quality macro- and micro-economic metadata based on proprietary Big Data and AI algorithms.

This 22nd Annual Report on the Global Art Market is distributed worldwide exclusively by Artprice by ArtMarket and Cision, which together have created the first international press agency dedicated to Art Market information: Artpress agency®, which belongs to Artmarket.com, is the global leader in art market information.

Read this 22nd Global Annual Art Market Report for free:
https://www.artprice.com/artprice-reports/the-art-market-in-2019

Confident and stable growth, with a record number of transactions worldwide

The Art market has continued to deepen with a record 550,000 fine art lots sold via auctions around the world in 2019, generating a total of $13.3 billion. This was the highest annual number of lots sold since 1945… creating the deepest and broadest public art market ever recorded.

Driven by a healthy combination of investment logic, speculative buying, passion collecting and insatiable demand for major signatures from the world's new museums, the global Art Market posted a buoyant level of activity in 2019 with a record number of 550,000 transactions worldwide.

The drivers of this growth are ease of access to Art Market information, electronic sales (99% of the market's participants are connected to the Internet) - the financialization of the market, a growing population of ever-younger art consumers (from 500,000 after WWII to 120 million in 2019) and the extension of the market to the entire Asia/Pacific area, plus India, South Africa, the Middle East and South America.

In terms of turnover, the global Art Market posted a contraction of -14% mainly due to a dearth of masterpieces above the $50 million threshold; however, the unsold rate remained perfectly stable at 38%, as did the overall art price index, which only changed +0.48%.

Remember the "unsold rate" has been closely watched for 120 years as it quickly indicates when a market is moving into speculative mode (below 20%) or into a meltdown of confidence mode (over 60%). According to the famous Art Market sociologist Raymonde Moulin, the current rate of 38% is close to the "ideal" unsold rate.

The strength of the Art Market is related to its unparalleled level of selectivity, very much reflecting Artprice's dictum "Buy the right work, from the right period, with a good story, by the right artist, at the right time."

Over 20 years, the Art Market has experienced very substantial growth

An efficient, liquid and transparent Art Market that resembles financial markets.

In a world where many countries are posting quarterly economic growth rates well below 1%, the Art Market has once again confirmed its efficiency, liquidity and transparency... just like a financial market. The key growth figure bear witness to this evolution:

- the Art Market's total auction turnover has grown fourfold since 2000, from $3.2 billion to $13.3 billion in 2019

- the number of lots sold has doubled over the same period from 272,000 lots sold in 2000 to 550,000 sold in 2019.

Our Artprice100® (a global index covering all historical periods of creation combined: i.e. Old Masters, the Modern period and the Post-War/Contemporary periods) showed a +396% increase in value between 1 January 2000 and 31 December 2019.

While the Central Banks – and notably the ECB – are maintaining close to zero or even negative base interest rates, the Art Market is posting frankly insolent health and our Artprice100® virtual index (covering all historical periods of creation combined) is currently posting a +396% increase since 2000.

The Internet (Microsoft estimates over 6.3 billion people are connected worldwide) has now become the principal and definitive forum for auction operators worldwide and they are using it to consolidate their market shares on all continents. Of the world's 6,300 auction houses, 99% are today present on the Internet (versus just 3% in 2005).

France joins the quartet of major Art Market powers

France posted the best performance in its auction history, raising its auction turnover +18%. With a total of $830 million in 2019, it substantially upgraded its fourth place in the ranking of major Art Market powers. However, it still has a long way to catch up with the 3rd-placed UK, which posted an annual auction turnover total on fine art 2.5 times higher.

thierry Ehrmann: "If Eric Turquin's Caravaggio had sold at auction, as planned, and not privately two days before its scheduled auction in Toulouse, France's annual turnover total would have been close to $1 billion in 2019."

Nevertheless, France's fine art auction strength is essentially its core high-volume backbone. With 82,000 fine art lots sold in 2019, France represented the second largest market in the world, behind the United States (99,000 lots sold), but ahead of the UK (70,000) and China (66,000).

France can today congratulate itself on having the strongest auction house in Europe: Artcurial, which now ranks 11th in the world by annual turnover.

General overview of 2019

The global Art Market generated $13.32 billion, down -14% mainly due to a drop in the number of ultra-high value masterpieces offered (worth > $50 million)

The number of lots sold worldwide reached a new historical high of 550,000

The average lot price in 2019 reached $24,300

The median lot price was $940

Approximately 90% of all lots sold fetched less than $17,000

The unsold rate remained stable at 38% (slightly more than a third)

The overall price index remained stable at +0.48%

The Contemporary art price index was up +4.44%

Financial performances

Repeat sales* show an average annual return varying between +5.5% and +8.2% since 2000

Works purchased between $200,000 and $1 million generate the strongest annual return: +8.2% since 2000

* The same work bought at auction and sold at auction in 2019

Soft Power

The United States ($4.6 billion) outperformed China ($4.1 billion) and the UK ($2.2 billion)

China suffered a milder correction (-9%) than the United States (-22%) and the UK (-21%)

The top three powers on the Art Market accounted for 82% of global fine art auction turnover

France was the only major power to post positive growth: +18%

Auction houses

Christie's and Sotheby's together hammered 54% of the global art auction market: $3.65 billion and $3.59 billion respectively

Five Chinese auction houses ranked in the Top 10 worldwide

Phillips confirmed its excellent 2018 results with its second best-ever annual total, despite an -11% contraction

Artcurial ranked 11th in the world becoming the leading European auction house

Artists and record results

In 2019 there was only one auction result above $100 million (compared with two in 2018).

Claude Monet's Haystacks (Meules) (1890) peaked the market at $110.7 million.

Its value was multiplied by 44 since its previous auction in 1986.

Claude Monet arrived second in the general classification by annual auction turnover, below Pablo Picasso and above Zao Wou-Ki.

Jeff Koons recovered the title of "most valued living artist in the world" when his Rabbit (1986) fetched $91.1 million

Gerhard Richter and David Hockney were the world's best-selling living artists, each with annual totals of $130 million in 2019.

Three main trends

1. Street Art is increasingly present on auction podiums, with its own stars: Kaws and Banksy. Lots of other street artists are moving up the sales rankings including Invader, Stik, Shepard Fairey and Vhils.

2. African-American and African-origin artists are recovering their rightful places in art history and in the market. Kerry James Marshall climbed to 55th place in Artprice's general ranking.

3. Christie's HI-LITE sale in Hong Kong put a name on the first major art movement of the 21st century.

The Museum Industry® is a global economic reality in the 21st century that represents the driving force behind the Art Market

The growth of the museum industry is also playing a crucial role. With more than 700 new museums opening every year, the museum industry has become a global economic reality in the 21st century. More museums opened between 2000 and 2014 than in the previous two centuries.

Demand for museum-quality works is one of the key factors in the spectacular growth of the Art Market. The Art Market is now both mature and liquid.

https://www.artprice.com/artprice-reports/the-art-market-in-2019

Source: Yahoo

Marron Collection and Mona Lisa Made from Rubik's Cube

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Tue, 25 Feb 2020 21:21:00 +0000

A couple of interesting items happening withint the art world. First, the Marron which is being privately sold through Gagosian, Pace and Aquavella has, according to artnet news sold two Picasos to Steve Wynn for $105 million. There are reports that more than $200 million worth of art has already been sold.

Steve Wynn Paid More Than $100 Million for Marron’s Picassos – The casino mogul is reported to have snapped up two Picassos, Woman With Beret and Collar (1937) and the 1962 portrait Seated Woman (Jacqueline), from the estate of the late Don Marron for $105 million. Wynn is believed to have already told friends about the purchase, though a spokesperson for his art business did not confirm or deny the sale. Another collector who was offered works from the estate, which is being sold by Gagosian, Pace, and Aquavella galleries, says that artworks worth more than $200 million from the collection have already found new homes. (Wall Street Journal

Source: artnet news

CNA reports on a 2005 art project of the Mona Lisa made from 300 Rubik's cubes sold at auction for over $500,000.

CNA reports

PARIS: A Mona Lisa as puzzling as the smile of Leonardo da Vinci's muse - made out of nearly 300 Rubik's Cubes - sold for nearly half a million euros at an auction in Paris on Sunday (Feb 24).

Created by the French street artist Franck Slama, famous for the pixellated Space Invader mosaics that have popped up on city streets around the world, the "Rubik Mona Lisa" sold for 480,000 euros (US$521,000), a record for the artist, Artcurial auction house said.

Its guide price was 120,000 to 150,000 euros.

Slama, who works under the pseudonym "Invader", has playfully styled himself the founder of a new school of art that uses the iconic 1980s puzzle as the medium: "Rubikcubism."

The 2005 "Rubik Mona Lisa" was the first in a series of pieces inspired by the great paintings in history.

Slama has also produced pixellated reproductions of Edouard Manet's 1863 masterpiece "Le Dejeuner sur l'Herbe" (The Luncheon on the Grass) as well as Gustave Courbet's "L'Origine du Monde" (The Origin of the World).

Source: CNA

Denver Public Library's Art Collection

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 23 Feb 2020 21:13:00 +0000

This April 24-27 the International Society of Appraisers will hold its annual conference in Denver Colorado at the Brown Palace Hotel. I found this Denver Post article on the Denver Public Libaray's art collection both interesting and timely. The main collection at the library was assembled in the 1930s, and the rest were as donations were made. So, if you are in Denver for the ISA conference, or just visiting for other reasons, the Denver Public Library might be a destination.

The Denver Post reports

The Denver Public Library’s art collection is one of Colorado’s least-appreciated cultural treasures, a well-kept, well-cataloged and loosely connected assemblage of colorful and impressive objects that span multiple art movements. Thanks to the state’s world-class geography, it’s particularly strong in landscapes.

But perhaps more than that, the sprawling compilation is an important civic asset, holding a century-plus of offerings from Denver’s biggest names in painting and sculpture, artists who rose to the top of their fields and defined the creative eras in which they lived.

It’s also full of surprises, as the current, greatest-hits exhibition at the Central Library’s Vida Ellison Gallery reveals.

“We have a wonderful and fairly extensive collection, and it’s relatively unknown,” said Rachel Vagts, DPL’s special collections and digital archives manager. “This is really an opportunity for us to showcase it.”

It’s best to say, upfront, that the library’s collection is not finely tuned. No doubt, the roster is impressive, and familiar names include Albert Bierstadt, Herbert Bayer, Allen Tupper True, Vance Kirkland, Angelo di Benedetto, William Sanderson, Frank Mechau, Roland Bernier and others.

There are also some of the city’s more recent art stars in the mix, including Steven Batura, Sushe Felix, Mel Strawn, Evan Anderman and Carlos Fresquez.

And there are skilled artists who have been overlooked (not surprisingly, they are largely female): Martha Epp, Elisabeth Spaulding, Amelia Potter and Reba Lee Savageau.

But these artists’ best works are not necessarily represented. There is one undisputed masterpiece in the collection, Albert Bierstadt’s grand, 1877 “Estes Park, Long’s Peak,” though that’s in the care of the Denver Art Museum, the library’s “good, across-the-street partner,” as Vagts puts it, and an institution better-equipped to foster important works. But better examples of many of the artists’ products can be found at DAM, or the nearby Kirkland Museum of Fine and Decorative Arts, or at the Colorado Springs Fine Arts Center.

That has everything to do with the way the library’s collection was assembled. Nearly every piece was donated. The library only actively collected for a few years in the 1930s, filling in as an early repository for local efforts before DAM got serious about Western art.

Other than that, it’s happenstance. Someone offered to donate a piece and the library accepted.

That’s not to take anything away from just how entertaining the current exhibit is, or how interesting. Deborah and Warren Wadsworth, long-time library volunteers — and noted collectors — who organized the show had a lot of treasures to choose from.

Western art fans, in particular, will have plenty of the breathtaking experiences they crave, and in a range of offerings, from James Disney’s hyper-real, 1970 “Early Start, Rocky Mountain National Park,” which resembles a photograph, to Burnis Day’s fully abstracted, 1984 “Colorado River,” which reduces craggy rocks to something akin to the lines found on a topographical map.

Between that, there are more typical Western landscape examples, paintings that demonstrate the art of capturing high peaks and flowing streams in their most romantic light, such as William Henry Jackson’s “Lower Falls of the Yellowstone,” Pawel Kontny’s “Walpi Village, Hope Village, Arizona,” or Sauvage’s 1959 “Rainmaker,” a rural scene with a particularly interesting perspective that puts a gnarly oak tree front and center of the landscape.

The exhibit’s other strength is that it presents a visual history of the state’s development, with unusual offerings like the 1874 watercolor, “Denver from the Highlands,” co-credited to Paul Frenzy and Jules Travenier, which captures the city before it was encircled by suburban development, or Potter’s “Altman, Colorado,” which pictures the mining town at its most prosperous, or William Henry Read’s casual portrait of “Mayor Robert Speer,” dressed in a white cap and a narrow yellow tie.

And there are several process pieces that dive into how artists thought about their work. Mechau’s “Night Hero,” a 1934 pastel drawing of six horses frolicking on the plains, for example, served as a study for a larger painting. The piece is only 11-inches by 26-inches, but a viewer can see how he worked through shapes and colors and the relationship between individual subjects.

There’s also a fascinating, 1938 pastel by Kirkland, titled “Battle of the Washita-Black Kettle Massacre,” that shows the artist — before he became a noted modernist — digging into local lore while figuring out how to connect the dots of his narrative piece. It’s just a rough sketch depicting frontier soldiers brutally taking down indigenous fighters, but it carries a rich and dark tale.

If some of these works are less-known than they ought to be, it’s probably because the library doesn’t showcase its artistic holdings the way a museum does. In general, it’s more interested in providing high-level research tools to its users than serving as a gallery.

Rather than accessing works on a wall, patrons find them in the library catalog system, organized by subject matter or artist name. Look up a particular topic and you get the whole picture about it: “There’s a piece of art, there’s a book, there’s a documentary film,” said Vagts.

“It’s about how do things fit into the collection,” she said.

Though library users do access the works regularly. “Sometimes it’s scholars who travel a long way, sometimes it’s people with local interest,” said Vagts. Recently, “it was a class of middle school students.”

“If you want to see a piece, you come to the Mullen Room and we bring it out for you to look at,” said Vagts, referring to the Central Library’s Mullen Manuscript Room, a familiar spot for local researchers.

The library collection continues to grow, though at a measured pace. It accepts art gifts, but is a little more discriminating these days. Donation offers pass through a committee that decides if the object truly fits with the mission of a research institution. There are a number of places where folks can donate their treasures now — museums, universities, private collections — and the library wants to make sure pieces go to their best caretaker.

“If we offer to take something, we’re going to take very good care of it and make it available so our customers and the public can see it,” she said. “If we can’t do that for some reason, then this is not the right place for it.”

Source: Denver Post

A Big Win for Galleries - Selling Marron Collection

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 20 Feb 2020 21:04:00 +0000

Barron's, as well as the NY Times and Wall Street Journal are all reporting on the sale of former PaineWebber CEO nearly $400 million art collection. What is unique is the important collection is not being sold through Sotheby's, Christie's of Phillips, but through three major galleries. The galleries are Acquavella, Gagosian and Pace.

It will be interesting to follow the sales, if made public and if this is a one off unique sale, or if it becomes a trend. Concerns for both appraisers and collectors is the lack of transparency in sales reporting.

Barrons reports

Around three weeks ago, Marc Glimcher, president and CEO at Pace Gallery, called on his peers—and chief competitors—at Gagosian and Acquavella Galleries with the far-out idea of coming together to handle the sale of former PaineWebber CEO Donald B. Marron’s renowned art collection.

Shortly afterward Glimcher and his father, Pace Gallery founder Arne Glimcher, along with Bill Acquavella, Larry Gagosian, and Gagosian’s chief operating officer, Andrew Fabricant —all of whom had known and worked closely with Marron on his collection for decades—sat down with the family and their attorneys with their pitch, according to Fabricant.

“We extolled the fact you have enormous institutional memory and authority with these three galleries and you [the family] know them well,” Fabricant says. This is a group who had “lasting and meaningful” relationships with Marron, and “who actually care, because they cared about him personally.”

On Wednesday, the three global powerhouse dealers announced they had won the deal to handle the sale of the Donald B. Marron Family Collection, calling it an “unprecedented move.” Their win means Marron’s masterworks-studded collection won’t be offered publicly via one of the three major auction houses—Christie’s, Phillips, and Sotheby’s—which reportedly had all vied for the collection.

Representatives from the auction houses either offered no comment on the galleries’ announcement, or declined to respond.

As Marc Glimcher pointed out in a news release on Wednesday, the gallery-led project will “celebrate the lifelong relationships that can develop between collectors and dealers, and the role our galleries have played in supporting Marron’s vision.”

The news shocked many in the art world who had expected one of the auction houses would win the consignment.

“It will upset the apple cart enormously for Christie’s and Sotheby’s,” says Philip Hoffman, CEO at The Fine Art Group, an art advisory firm in London. The houses were probably “95% sure it would go to one of them.”

But Pace, Gagosian, and Acquavella all have “good placing power,” Hoffman says. “Each has been in the business for 30 or 40 years. There have been changes in the auction house teams in the last two years, and obviously the [Marron family] trustees decided they wanted to work with continuity.”

Marron, who died unexpectedly in December at age 85, was a renowned financier and art collector, who began buying art about 60 years ago for PaineWebber, a brokerage firm that was sold and folded into the Swiss banking giant UBS AG—along with the firm’s art collection—in the fall of 2000.

But Marron, who joined the board of the Museum of Modern Art in New York in 1975, serving as president from 1985-91, also collected on his own, starting with the Hudson River School painters and later moving to the Abstract Expressionists and beyond, according to the news release. The Marron Family Collection includes major works by Pablo Piccaso, Mark Rothko, Cy Twombly, Willem de Kooning, and Gerhard Richter, among many other stars of the art world, the galleries said.

A total dollar figure for the collection has not been released, although it’s estimated by various news outlets to be in the range of $400 million.

Unlike many collectors who walked through the gallery’s doors, Acquavella remembers Marron as far back as the 1970s, just coming in to “see what you had.” Then, he says, Marron “wanted to know everything about it.”

The first deal Acquavella says he made with the gallery was the sale of a Robert Rauschenberg Combine, a series by the artist that combined painting and sculpture. Then he bought works by Modern masters, including Pablo Picasso, Henri Matisse, and Paul Klee, Acquavella says.

“He loved to be involved in the art world from the very beginning,” he says.

Fabricant says he saw Marron every Saturday for the last 20 years. “He was really inquisitive, extremely tall, and demanded multiple cups of very strong tea,” Fabricant says. (Marron was 6-foot-6-inches tall.)

“He was extremely punctual—first off Saturday morning he’d be in my office,” Fabricant adds. “He loved talking about the shifting sands of the art world, what was developing and what wasn’t. He really loved the information exchange.”

Despite the fact all the gallery owners know each other and are friendly, they are huge rivals. But they came together out of “opportunity and necessity,” Fabricant says. To get them all together “on one page with one common goal—it happened, but it’s unprecedented.”

Having a consortium of three galleries banding together to compete against the deep pockets of the auction houses is unusual, a creative and “brilliant strategy,” says Naomi Baigell, managing director at Athena Art Finance, a unit of the online alternative assets platform, YieldStreet.

But these and other major galleries have been expanding their global footprints for years, and are often competing with the auction houses—which also do private sales—for consignments.

“As much as it’s been a shock, it’s been a long time coming,” says Baigell, who previously was director of corporate art services at Sotheby’s. “It’s a new paradigm now. It opens up the bridge of competition for these estates.”

In the case of the Marron collection, this arrangement makes particular sense because the artworks for sale are pieces “these galleries feel passionate about and know as well as the auction houses," she says.

There is some precedent for galleries to take the lead on a major consignment. In 2008, art dealer Ileana Sonnabend’s heirs reportedly consigned about $600 million worth of art in two transactions, one to a group of dealers in New York and Paris, and a second group to Gagosian, the publication ArtForum reported at the time.

The Marron family collection will be displayed at Pace and Gagosian in May, although the exact configuration of the exhibitions isn’t completely decided yet, Acquavella says. The galleries would like to be able to show the historical span of Marron’s collecting, but that “will be hard to do because it goes back so many years,” Acquavella says. The plan is to borrow pieces that have been given over the years to museums and other institutions, if they can.

The galleries also will be issuing a scholarly book about Marron's life and his collecting, that will accompany the exhibition. The volume, to be produced by Phaidon Press, “will explain what a great collector he really was, what a passionate collector he was,” he says.

That, Fabricant points out, will be quite different than an auction catalog that “ends up on a recycling heap,” the day after a public sale.

Source: Barrons

Keynesian Economics and Investing in Art, Emotional Dividends

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 16 Feb 2020 16:55:00 +0000

The Washington Post ran an interesting Bloomberg article on noted economist John Maynark Keynes about collecting and owning fine art. The Post/Bloomberg article reviews a recent Oxford Academic article looking at Keynes' collection and value based on insurance appraisals and note the increase in value over the years, showing strong increases, but still lagging behind the stock market index. Also, the article notes the following on the value increases "The ten most valuable items of the works he amassed account for 88% their total value — and just two of the works account for almost half of the entire collection’s valuation."

If you wish to review the Oxford Academic article which studies the portfolio and art collection of economist Keynes, click HERE.

The Washington Post reports

John Maynard Keynes was an economist, an investor, and an art patron. In the aftermath of the global financial crisis, his eponymous flavor of economics has become fashionable again. After a faltering start losing money in the currency markets, Keynes enjoyed a glorious run as a stock picker, building an endowment that still benefits his alma mater King’s College, Cambridge. For those wanting to emulate his prowess collecting paintings, a new study attempts to calculate how his art investments have fared compared with market returns.

The good news is that the study, published on the Oxford Academic website, suggests wealthy collectors can potentially enjoy the “emotional dividends” of owning art without missing out on returns. The bad news is that they’ll have to be either pretty astute in picking winners, or damned lucky in the artworks they buy. Keynes probably benefited from both.

Keynes started building his collection in 1918, buying works by Cezanne and Delacroix. In the following years, he added pieces by Cezanne, Degas, Matisse, Modigliani, Picasso, Renoir and Georges-Pierre Seurat. The latter purchase, at a price of 400 pounds ($520), was a preparatory study for the pointillist artist’s most famous work, “A Sunday Afternoon on the Island of La Grande Jatte.”

He resumed purchasing artworks between 1935 and 1937, including spending 3,500 pounds on Cezanne’s “L’Enlevement,” the most Keynes ever parted with for a single piece. By the time he bequeathed his portfolio to King’s College at his death in 1946, he had spent a total of 12,847 pounds amassing 135 pieces. (I sit on the King’s College investment committee that manages the endowment.)

While the report says it found no evidence that Keynes ever sold a painting he’d purchased, he wasn’t sentimental about his collection; in his will Keynes gives permission for its executors to sell parts of his bequest if needed to maintain his widow’s income.

The study values the collection over time by using various insurance appraisals conducted over the years as well as estimates commissioned by the authors from specialists in 2013 and 2019. If the combined works had kept pace with inflation, they would have been worth about 500,000 pounds last year. Instead, they were worth 76.2 million pounds, not too far short of the 90.2 million pounds the authors calculate Keynes would have generated in the U.K. stock market. “The long-term returns from the Keynes collection are substantial,” according to the report’s authors, David Chambers and Elroy Dimson of the University of Cambridge’s Judge Business School and Christophe Spaenjers of HEC Paris.

But there’s a catch. The ten most valuable items of the works he amassed account for 88% their total value — and just two of the works account for almost half of the entire collection’s valuation.

While the study doesn’t identify which works they are, I’m pretty confident that the Seurat study I mentioned earlier, which currently hangs in Cambridge’s Fitzwilliam Museum, is one of the blockbusting pair. The other, which the study says Keynes acquired for the princely sum of 1.50 pounds, was worth 20 million pounds in the most recent valuation. That’s quite a return.

If Keynes hadn’t been lucky or skilled enough to have bought those two stellar performers, the value of his collection would fall far, far short of what the stock market has delivered. “Extreme idiosyncratic positive returns — or the absence thereof — will matter a whole lot for the total return of any art portfolio,” the authors of the study write, with masterly understatement.

So the lesson from Keynes, if there is one, seems to be that in buying art, those emotional dividends stemming from the joy of ownership are probably a more reliable motivation than the prospect of turning a profit.

Source: The Washington Post

Fine Art and Fractional Ownership

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Wed, 12 Feb 2020 22:41:00 +0000

Yahoo Finance ran a rather interesting and good article on fractional investments in fine art and collectibles. This is a growing sector for investing in fine art, and appraisers, art advisors and financial advisors should all be aware of the various products and offerings and have a basic understanding of how fractional investing and ownership works.

The Yahoo/Bloomberg article gives a good understanding of the process and the currently players in the fractional art and collectible ownership marketplace.

Yahoo reports

Jonathan Sharpe, a 25 year-old accountant in Greensboro, N.C., never thought of himself as a “baseball guy,” but when he saw a 1909 Honus Wagner T206 baseball card valued at $520,000, he decided to buy it.

Not all of it, though. The card was being issued through the fractional ownership collectibles site Rally Rd.—there were 10,000 shares valued at $52 apiece. “I thought it was a good idea,” Sharpe says. “They broke it down into enough shares that it was affordable.” He had the Rally Rd. app open when the card listed and bought a single share; less than 20 minutes later, every single share had sold. “It was insane,” he says.

Sharpe, who heard about Rally Rd. on Twitter, is one of thousands of individuals around the globe who’ve bought tiny fractions of luxury collectibles in an effort to participate in an economy previously reserved for the very wealthy.

“There’s a big focus around the investment aspect” of collectibles, says Micaela Saviano, a partner at Deloitte Tax LLP. “There’s been such a run-up in the market in the last 20 years, and there’s more and more media focus around growth in the art market.”

It’s not just art and baseball cards. In the past few years, these fractional ownership structures have sprung up for vintage cars, Magic: The Gathering cards, racehorses, vintage sneakers, and comic books.

John Day, a senior manager at Deloitte and a Rally Rd. user, says he’s spent about $21,000 on shares in Lamborghinis, watches, baseball cards, and rare books. “As someone who’s not going to buy a full Ferrari, I now have access to [invest in] one,” Day says. “But I don’t have to maintain it, insure it, secure it, or store it.”

Different Models

Each company’s model is slightly different. Rally Rd. (“The investments of the rich, now available to all”) allows people to buy and sell shares of collectibles while maintaining a block of shares in each. Feral Horses allows people to buy and sell artworks, then takes a commission on the money raised for each object. Masterworks, based in New York, buys artwork at auction, sells shares of the art, and then takes a fee and cut of the profits when it’s sold.

There are more than a dozen of these companies around the globe. A partial list includes: Acquicent (collectibles and fine art), Artopolie (fine art), ArtSquare (fine art), CurioInvest (supercars), Look Lateral (collectibles), Maecenas (fine art), Malevich (fine art), My Racehorse (race horses), Mythic Markets (games and comic books), and Rally Rd. (cars, watches, sneakers, and other collectibles).

All share a unifying premise: Luxury goods won’t just hold value, they’ll appreciate. “Our thesis is that art is a large asset class,” says Masterworks founder Scott Lynn. “If you look at different segments of contemporary art, it’s performed at about 11% every year, and that’s outperformed every major public equity market.”

Survivorship Bias

The reality is far more complicated. All artworks, racehorses, cars, and trading cards are not created equal, and not all of the “investment opportunities” offered by fractional ownership companies are the best in their field.

Just because one racehorse wins the Preakness doesn’t mean that every racehorse has a shot, and just because one Picasso delivers 800% returns doesn’t mean that all Picassos will do the same.

The claim that the art market beats the S&P 500 has been largely discredited, due to its aggressive survivorship bias. “The performance of the [top 50 contemporary artists] is largely a function of the fact that hot artists keep on getting added—after they’ve become hot,” wrote Felix Salmon, then a Reuters columnist, in a 2012 assessment of art market indices.

“It’s a classic case of investing in hindsight: if you only bought things which performed extremely well, then you would have made lots of money.”

Nevertheless, stories about wealthy people buying paintings and then making a large fortune a few years later are seductive, and it’s those stories that many fractional ownership companies are banking on to drive participation.

“People have the perception that any given artwork will triple in value,” Saviano says. “And that’s not the case. Each work of art is unique and needs to be analyzed on its own.”

As a result, it’s easiest to break fractional ownership companies into two broad categories: “collectibles,” for which value judgments are relatively straightforward (is a comic book in mint condition? Does the Porsche have all of its original interior? Is the Rolex rare?); and fine art, for which perceptions of value are constantly in flux.

Collectibles

Multiple collectibles sites have quickly found adherents.

Rally says it currently has $10 million worth of assets under management, with 150,000 active users. The platform has already sold two of its “assets,” a 2000 Ford Mustang Cobra, and a 2006 Ferrari F430 Spider “Manual” realizing gains of 18% and 16%, respectively.

Currently, there are about 60 cars on the site, along with 40 objects that include a gold Rolex. “We’re investors in these assets, up to 10%,” says Rob Petrozzo, a co-founder of the site. “So we benefit from their appreciation.”

Meanwhile, Mythic Markets launched in August 2019, with a “Black Lotus” Magic: The Gathering playing card valued at $90,000. “We sold through the first offering pretty quickly,” says site founder Joe Mahavuthivanij. “One hundred and twenty-four investors got involved in that deal, and I think it came out to an average of $700 per person.”

To the uninitiated, hundreds of people buying shares of a $90,000 playing card they’ll never touch, and thousands of people buying shares in a car they’ll never drive, might seem like a stretch.

But Mahavuthivanij points out that, from his end, “these communities are huge, and global, and Magic’s been around for 27 years now, and it’s continuing to grow.”

It stands to reason, he continues, that a collectible tier has emerged. “There’s an active secondary market where these are changing hands,” he says. “There are aggregators and online auctions that we use as comparable data points—if you were to value a house, you look at comparables in the area; we’re doing the same thing.”

Art

In the art world, definitions of value—not to mention desirability—are much more fluid. Take an artist such as Andy Warhol, whose market has been languishing since its high in 2014. Anyone can look at an artwork’s return—an 8,220% return in 30 years for Warhol’s Last Supper!—and assume that it’s a smart investment. The person who bought it for $99,000 in 1988 certainly was wise. It sold for $8.2 million in 2018.

But that doesn't mean its value will grow the same way in the future. The 2018 sale price, which includes an auction house premium of nearly 20%, barely eked past its low estimate $8 million hammer price (which doesn’t include that premium). So the work wasn’t quite worth what the auction house expected, making its future value far less than sure. Past results are no guarantee of future performance.

(Other artists whose markets have soared, then deflated in recent years, include Damien Hirst, Jeff Koons, Christopher Wool, and a baker’s dozen of young process-based abstract artists who rose and fell from 2007 to 2014.)

Some of the owners of fractional art companies are carefully messaging around this unpredictability.

“Our minimum investment is €1 [$1.10],” says Francesco Boni Guinicelli, who, with Fabrizio D'Aloia, co-founded Artsquare. It has 3,000 users, 500 of whom have bought shares in a 1984 Warhol silkscreen print valued at €28,000. “We’re not evangelizing investing in art, but rather participating in the art world on a different level.”

The share price, he says, “is symbolic, but our target is the person who goes to a museum and wants to buy a mug with a Picasso on it, or a poster. If you’re willing to buy that, you might want to buy a share of an artwork.”

Artsquare’s business model is built on a 4% transaction fee for buying shares; investors can choose to pay a flat subscription instead.

Feral Horses, one of the other fractional art companies, is based on effectively the same principle: “By making the entry point so low, it opens up completely new possibilities,” says Francesco Bellanca, the company’s chief executive officer. “We sold shares in a €200,000 marble sculpture, which we then loaned to a museum in Rome,” he continues. “Four hundred of the 1,000 or so co-owners then flew to Rome to meet, and mingled. They were part of a community.”

The point, both men say, is that investing in art could be a good investment, but it is definitely a way to become part of an art world community.

That alone, they argue, is worth the share price. “That’s what we try to do on a daily basis,” Bellanca says. “How do we make this [investment] become an increasingly active participation in the art world?” The answer, he says, is that “rather than just give investors an economic interest in the piece, we work with galleries and artists to give them the opportunity to have a follower base that participates in the journey.”

Lynn, of Masterworks, argues that people should feel confident in the art market as a viable investment vehicle. “If you think about portfolio construction in general, a core tenet for any investor is diversification and lack of correlation,” he says. “Art isn’t correlated with other asset classes, and historically, certain segments of the art market have performed very well.”

For some investors, that argument resonates. “It’s not a certain investment, but at the same time I don’t see art to be riskier than the tech world,” says Nadir Luvisotti, a 31-year-old investment banker at Deutsche Bank in London, who spent about €2,000 to buy shares in the Warhol print issued by Artsquare. “Andy Warhol is a famous artist, and probably right now, he’s a commoditized one—everyone knows him and the value of his paintings.”

Hitting A Wall

Investment or no, all fractional ownership plans have to reconcile their “investors” to the fundamental paradox of partial ownership: They’ll never be able to drive their cars, read their comic books, taste their wine, or hang their paintings on their wall.

Buyers might now have access to the theoretical returns of the very rich, but for many of these ventures, that’s it. One of the primary joys of being a collector will, for the time being, still be out of reach.

“Part of the reason people like to own art is to see it on their walls,” says Saviano, the Deloitte Tax manager. “When you take that away, you have to focus on the investment [component], and when you do that, it has to be substantiated.”

For Day, who bought shares of Lamborghinis on Rally, that hands-on experience is beside the point.

“I’m not so worried about driving the cars,” he says. “If I wanted to drive a Ferrari, I can rent a Ferrari” through supercar adventure sites. “I invested in it because it’s accessible to me. Buying a whole car is a kind of luxury, and whoever does that can say that their collectible car is in their living room. Cool. But that’s not me.”

Source: Yahoo Finance

Amazon's Jeff Bezos Buying Art

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 09 Feb 2020 21:22:00 +0000

Bloomberg is reporting that Jeff Bezos, founder of Amazon and one of the richest men in the world is starting to put together a fine art collection.

It is reported that Bezos purchased “Hurting the Word Radio #2” by Ed Ruscha for $52.5 million at Christie’s this past fall setting a record for the Los Angeles artist and “Vignette 19” by Kerry James Marshall, at Sotheby's for $18.5 million.

Bloomberg is reporting

Jeff Bezos kicked off the new decade with a $1.8 billion windfall from the sale of Amazon.com Inc. shares. There’s growing excitement in the art world that some of that -- or another chunk of his 12-figure fortune -- may be used to build an art collection.

Bezos, 56, bought two significant works during New York’s November auctions, according to art dealer Josh Baer, writing in his newsletter the Baer Faxt this week.

One piece, “Hurting the Word Radio #2” by Ed Ruscha, fetched $52.5 million at Christie’s, setting a record for the Los Angeles artist. The second, “Vignette 19” by Kerry James Marshall, sold for $18.5 million at Sotheby’s, more than doubling its high estimate.

“Every season it seems someone new or some new region” comes in and starts buying art and props up the market - “but when it is the world’s richest man it has the chance to move the needle,” Baer wrote in his newsletter without detailing how he obtained the information. “I stand by what I wrote,” he said by email.

Representatives for Sotheby’s and Christie’s declined to comment. Amazon’s press office didn’t respond to requests for comment.

Bezos was seen walking through the previews at Sotheby’s in November. During the evening sale of contemporary art, “Vignette 19” was bought by Cassandra Hatton, Sotheby’s vice president and senior specialist in the books and manuscripts department, on behalf of an anonymous client.

Art dealers and auction specialists said that Bezos -- if he did purchase the works -- would be a major new player in the market. It’s unclear what else he’s acquired.

Entry into the art world would be the latest pivot from the formerly low profile Bezos once cultivated. In the past few years, he’s had a style makeover and rarely been out of the headlines since he and MacKenzie Bezos divorced in 2019. That includes hitting the red carpet with girlfriend Lauren Sanchez and hosting a bash at his Washington mansion for the political and financial elite. He’s also currently house hunting in Los Angeles, according to the New York Post.

The Amazon founder has unmatched firepower to support these interests. He’s the richest person on the planet with a $125.6 billion fortune, according to the Bloomberg Billionaires Index. His interest in art could have a significant impact on a market where new art buyers are often responsible for driving prices higher.

Japan’s Yusaku Maezawa burst onto the scene in 2016, scooping up $98 million of art in two days; a year later, he paid $110 million for a painting by Jean-Michel Basquiat, a record for an American artist at auction. Saudi Crown Prince Mohammed bin Salman bought Leonardo da Vinci’s “Salvator Mundi” for a record $450 million in 2017. The masterpiece was being kept on the superyacht Serene, according to Artnet.com.

Following a slowdown in 2019, the top end of the art market is poised for a boost with two significant collections, potentially worth $1 billion, in play. Some of it may land on the auction block in May during the next big round of New York sales.

“Whatever his motivation,” said Wendy Cromwell, a New York-based art adviser, “Bezos is buying art at the right time.”

Source: Bloomberg

Art Basel Hong Kong Cancelled

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 06 Feb 2020 22:16:00 +0000

The Art Newspaper is reporting that due to the coronavirus, Art Basel Hong Kong has been cancelled. The fair has been struggling with many issues and dealer losses over the past few weeks, and it appears the coronovirus was what tipped the balance to cancel. According to reports, in addition to the coronovirus the fair was dealing with issues such as dealers backing out of contracts, concerns over attendance as freedom issues between Hong Kong and China and the various protest movements.

The Artnewspaper reports

After weeks of uncertainty, the organisers of Art Basel in Hong Kong have finally announced they are cancelling the eighth edition of the fair due to the coronavirus outbreak. "Numerous factors informed this decision, including: fundamental concern for the health and safety of all those working at and attending the fair; the severe logistical challenges facing the build-out and transit of artwork to the show; and the escalating difficulties complicating international travel, all arising as a result of the outbreak of the coronavirus," the organisers said in a statement released today.

Marc Spiegler, the global director of Art Basel added that the decision to cancel Art Basel Hong Kong was "an extremely difficult one for us. We explored every other possible option before doing so, gathering advice and perspectives from many gallerists, collectors, partners and external experts".

"Our thoughts are with those affected by the recent coronavirus outbreak around the world," he adds.

The virus has so far infected more than 28,000 people in China and killed more than 560—more than during the SARS outbreak in the early 2000s. The World Health Organisation declared the coronavirus a global emergency on 30 January, prompting outcry from several dealers who said they could not send staff to work in such an environment.

In Hong Kong, where 18 cases have been confirmed, museums and schools have been closed and authorities said that beginning this weekend they would mandate that anyone entering the city from mainland China "self-quarantine" for the 14-day incubation period of the virus. There has also been widespread cancellation of flights in and out of the region and cross-border trains have been closed.

The New York-based dealer David Zwirner told ArtNews that he had pulled his Luc Tuymans exhibition, which was due to open in Hong Kong to coincide with the fair. The show will be moved to another of the gallery’s territories. Pace Gallery’s Hong Kong outpost is also closed until 4 February “due to the coronavirus outbreak”.

Spiegler says the fair organisers are "acutely aware of the important role that the fair plays within the region's cultural scene and for our galleries, both in Asia and across the globe. Our team dedicated extensive time and effort to ensure our show in March would be a success over the course of the past year. Unfortunately, the sudden outbreak and rapid spread of the novel coronavirus radically changed the situation".

Before the outbreak of the virus, fair organisers offered to refund 75% of booth costs if the fair was cancelled. Some dealers suggest Art Basel’s insurance should cover further costs, however, insurers say that epidemics and pandemics are often deliberately excluded from cover.

It is only the second time an edition of the Art Basel global franchise has been cancelled; the first edition of Art Basel in Miami Beach was postponed in 2001 after 9/11, costing the organisers an estimated $4m.

‘We are deeply grateful to our exhibitors, partners and friends all over the world, and especially in Hong Kong, who have stood by our side, lent their support, and shared insights and opinions over the past days and months," says Adeline Ooi, the director of Art Basel, Asia. "Our commitment to Asia and Hong Kong has not changed, and we look forward to the 2021 edition."

Art Basel had faced increasing pressure from dealers to cancel the fair in the lead up to the announcement. According to The Canvas industry-insider newsletter last week, 12 dealers had already confirmed they would not participate, while 24 leading galleries including Lévy Gorvy, Lisson and Paula Cooper wrote a letter to the organisers on 16 January expressing concerns over a drop off in the number of collectors and patrons attending, as well as threats to freedom of expression due to increased Chinese control in the semi-autonomous region.

The pro-democracy protests that have rocked Hong Kong for the past seven months had also put a strain on business—the number of collectors expected to attend the fair had been significantly lower. Adding to the malaise, artists had also voiced concerns to their galleries about exhibiting in a region where freedom of expression has been increasingly curtailed by Beijing.

“Many of our artists are unwilling to have their work shown at the fair,” the exhibitors wrote, because increasing Chinese control is not “consistent with their core belief in the freedom of expression”.

One anonymous dealer said the fair would have been “a full scale disaster” if it had gone ahead, while the London dealer Richard Nagy had described the show as “fatally wounded” and “commercially on artificial life support”.

Despite this, fair organisers refused to pull the plug, saying they were “working hard to review all possible options”, but to cancel or postpone was “a complex process, with many factors and multiple stakeholders”.

Other casualties of the Coronavirus include the new X Museum, which was due to open in Beijing on 17 March. On a post on Instagram, the co-founder Michael Xufu Huang said: “In order to fully co-operate with the prevention and control of the outbreak, the opening […] has been delayed.” The VIP preview and dinner on 15 March have also been postponed indefinitely. Meanwhile, the CAFA Art Museum has postponed its inaugural triennial, which had been due to open on 18 January. Art Central, which runs concurrent to ABHK, has not yet issued any statement regarding the coronavirus or its plans.

Source: The Artnewspaper

Christie's Experiments at the Lowe End of the Price Range

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Thu, 06 Feb 2020 00:00:00 +0000

artnet news is reporting on an experimental auction at Christie's, called Chrsitie's 100 where there were 92 lots with starting bids as low as $100. The interest was high, 96% of the lots sold and the auction totaled $357,375. It was of course an online sale, but it proved very successful with about 300 registered to bid and 160 unique bidders.

artnet news reports

Christie’s bet that an online-only sale of lower-priced art would attract new buyers seems to have paid off big time. The sale, dubbed Christie’s 100, featured 92 lots by many well-known contemporary artists, with bids starting at as low as $100. Certain works even sold for considerably less than the average New Yorker’s monthly rent, including a Louise Lawler print for $1,000, and a John Bock work on paper for $750.

In all, 96 percent of the works found buyers and the sale pulled in $347,375. That might seem like a drop in the bucket for an auction house whose marquee evening sales routinely feature seven- and eight-figure trophy lots that draw bids from billionaires around the world. But it goes a long way towards locking in new and aspiring buyers—especially those more comfortable making bids online, without having to raise a paddle in a packed auction room.

Two nights after the sale went live on January 28 there were already 160 unique bidders out of 300 registrants, indicating even more activity to come. Bidding wrapped up today.

“I have wanted to do this ever since I took over First Open a couple of years ago,” said Christie’s postwar and contemporary specialist Noah Davis in a phone interview with Artnet News, referring to the house’s initiative to offer art at more accessible price points. “As the First Open venue matures, there are more objects in the $20,000-plus range. That is where we make the most money. But we didn’t want to lose sight of the opportunity to correctly market lower-value items too.”

Noting that there are typically hundreds of bidders registered for First Open sales, Davis says that sales like Christie’s 100 are a boon to a demographic with a modest collecting budget. “If there is a percentage that would like to bid, but [they] don’t necessarily want to bid on a $20,000 object, we want them to know that this is where they can come,” he explains, “as opposed to sifting through 300 lots in order to find things in their striking range. That can be tedious and overwhelming.”

While the vast majority of lots had an estimate below $5,000, a few objects were in the $10,000 to $20,000 range.

The top price of the sale was earned by a Vera Lutter triptych, Frankfurt Airport VII: April 24, 2001 (2001), that opened with a starting bid of $100 and sold for $37,500 on an estimate of $20,000 to $30,000. Other lots that opened with $100 bids included Roxy Paine’s Amanita Muscaria #5 (2002), which sold for $8,750; Jean Tinguely’s Vive la fête des idiots (1989) which sold for $8,750; Yayoi Kusama’s Yellow Pumpkin & Red Pumpkin (2015), which went for $3,500; and Matt Mullican’s Untitled (1991), which realized $8,750.

Also among the five-figure works was a Jeff Koons Balloon Dog (Red) (1995) stainless steel sculpture, which sold for $16,250.

Davis said he saw patterns typical of online sales including strong bidding presence from New York and Los Angeles as well as London, and what appears to be a spike in bidding from people arriving at work early in the morning or bidding from home upon their evening arrival.

Following the successful experiment, Christie’s will see if the enthusiasm carries over to the next few First Open sales. “It’s not about trying to make an extreme or insane amount of money for Christie’s by nature of the profile,” says Davis.

Source: artnet news

Strong Attendance and Buying at London Art Fair 2020

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Mon, 03 Feb 2020 23:03:00 +0000

Art and Collections reports on strong attendance and buying at the 32nd London Art Fair with over 23,000 visiting the fair. Dealers were noting strong interest in emerging contemporary art, photography and British art. I need to post on the Americana week sales and shows, but from London this is a good sign for 2020 with active collectors and attendance, as well as strong international gallery representation.

Art and Collections reports on the fair

London Art Fair 2020 at the Business Design Centre in Islington concluded its 32nd edition on Sunday 26 January, reporting robust sales and an overall attendance of 23,000 visitors. Confidence in both modern and contemporary art was evident as the Fair opened with a Preview Evening on Tuesday 21 January, where collectors, institutions and art enthusiasts enjoyed a first look at presentations by 129 galleries from 14 different countries.

Sarah Monk, Director of London Art Fair, said: “ As we enter a new decade, London Art Fair endeavours to continue reflecting the art market in all its breadth, from established and more traditional mediums to new areas of growth, such as the surge in interest in textile art. We celebrate our heritage through initiatives such as our annual Museum Partnership, whilst also embracing change and disruption through our curated sections which feed our visitors’ and collectors’ appetite for discovery.”

Galleries
London Art Fair welcomed many returning galleries alongside new exhibitors from the UK, Europe, Israel, Japan, Singapore and Canada, who enjoyed strong sales across the Fair and specially curated sections. London Art Fair prides itself in nurturing collecting at all levels, welcoming both established and emerging artists to the Fair.

Confidence in the contemporary art market was evident with collectors acquiring emerging artists, including strong sales of Judith Berry and Jessica Quinn by first-time Art Projects exhibitors Art Mûr and Kittoe Contemporary, reflecting the continued interest in contemporary painting . Meanwhile, four paintings by artist Christopher Hanlon, priced between £5,000-£7,000, were sold to a notable collector by Domobaal.

Drawings by the Spanish artist Guillermo Martin Bermejo sold out at James Freeman Gallery, whilst two of David Theobald’s digital works on display in the Screening Room were purchased from a limited edition series of six.

See also: London Art Fair 2020 Announces Talks and Tours Programme

Another newcomer, Blond Contemporary, sold a selection of abstract works, while TAG Fine Arts sold multiple works including those by the contemporary British street artist Bambi, who explores contemporary female identity using a traditionally male-dominated medium.

Galleries specialising in Modern British art, which has long been a key component of the Fair, also reported healthy sales. Ten enigmatic canvases by Pat Douthwaite were sold for between £7,500- £15,000 each from The Scottish Gallery’s striking presentation of the outsider artist. The Nine British Art sold a cast bronze sculpture and the painting Levant (Cornwall) by Leigh Davis; Crane Kalman Gallery reported strong sales exceeding £100,000; and Beaux Arts sold multiple paintings by David Bomberg, with prices reaching up to £60,000.

Platform
The curated section, Platform, continued to perform well in its second year, with Candida Stevens’ solo presentation of Alice Kettle selling all twelve works by the artist with prices up to £24,000. Oxford Ceramics Gallery sold all four of their wall-hangings by the pre-eminent British weaver Peter Collingwood, created on the artist’s own handbuilt loom, priced at £6,000-£10,000 each. Textile art was also popular across the Fair as a whole, with Raw Editions selling Grayson Perry’s Marriage Flag for £7,000. Candida Stevens said: “The reception of Threading Forms has been phenomenal. The position of textile art within the wider context of the art market has grown exponentially in recent years and I am delighted that this has been reflected in strong sales at the Fair. While each of the galleries participating in Platform has brought something unique, together the section has become more than the sum of its parts. I hope that visitors who were not previously familiar with the medium will be inspired to explore textiles long after they leave the Fair.”

Photography continues to be a popular medium at London Art Fair. Peckham-based newcomers ECAD Gallery sold work by all three photographers on their stand – Olga Karlovac, David Magee and Eurivaldo Bezerra – working exclusively in black and white. Meanwhile, The Contemporary London sold eleven prints by Suzanne Moxhay presenting a timely look at the boundaries between nature and man-made objects.

Visitors’ interest in topical environmental issues was also evidenced by multiple sales of a portrait of climate activist Greta Thunberg from James Freeman Gallery. Elsewhere, the Fair’s annual Photo50 exhibition, which explored the vast pool of talented living female photographers aged over 50, sold six works by artists Sandra Jordan and Kim Shaw. Occupy the Void, curated by gallerist and writer Laura Noble, provided a forum to investigate the cultural ‘space’ inhabited by women, who make up 80 percent of photography students but only 15 percent of the professional industry.

Laura Noble said: “The response to this talented group of female artists, both established and in the early stages of their careers, has been fantastic. In each of their own personal ways, these women have ignited a conversation about how we take up space in all its different guises. I hope that visitors to the fair have gone away with more of an insight into the unique perspectives of these artists and appreciate the action taken together to address this imbalance within the art world and in society more generally.”

Partners
London Art Fair’s Museum Partner for its 2020 edition was Southampton City Art Gallery, who presented stand-out works from their important collection of Modern British and contemporary art by figures including Frank Auerbach, Stanley Spencer and Maggie Hambling, as well as a large Jeremy Deller wall painting installation titled I Love Melancholy.

Clare Mitchell, Curator of Art at Southampton City Art Gallery, said: “It has been a pleasure to share a platform with other galleries and make connections between their artworks and our own. We are very grateful to London Art Fair for affording us the opportunity to share some of our art with the capital and we invite visitors to the fair to see more of our collection at its home in Southampton.”

An extensive talks programme took place throughout the Fair with curators, gallerists, artists and other leading figures within the arts industry joining panels exploring art as therapy, code-based art and multi-authored photography, as well as identifying collecting trends for the home and museum. During the Fair’s popular Thursday Late, artist Samantha Humphreys staged an interactive performance responding to the Screening Room’s look at the boundaries between work and play, creating bespoke woodblock artworks for visitors based on their smartphone displays.

Hackney-based PEER Ambassador and artist Devinya Thomas also hosted a drop-in interactive workshop using analogue photographic processes as part of the Fair’s education programme.

Meanwhile, students from London Art Fair’s official tours partner Sotheby’s Institute of Art provided engaging daily tours around themes including Modern British art, contemporary art, prints and editions, textiles and emerging markets.

Source: Art and Collections

Wealthy Milllennials Prefer Luxury Goods Over Traditional Investments

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Sun, 02 Feb 2020 20:59:00 +0000

The UK's Telegraph recently ran an interesting article on wealthy millennials and how they are spending and investing their money. Many choosing alternative investments and luxury goods over traditional investments such as stocks and bonds.

The Telegraph article states "Research has shown that those under 34 are much more likely than other generations to own other ‘alternative’ investments, including art, jewellery and fine wines – and are shunning more traditional assets such as stocks, shares and bonds in the process."

The Telegraph reports

In today’s social media era, where appearance is everything, a share certificate no longer cuts the mustard, explained 32-year-old watch collector Silas Walton. “Young millionaires want to show off their wealth: you can’t wear stocks and shares so they put their money elsewhere,” he said.

He runs A Collected Man, a business selling investment-grade luxury watches, and said a significant number of his clients fall into this ‘millionaire millennial’ bracket.

“The typical buyer is usually a 30-year-old male, based in London, often working in the City or the head of a start-up,” he said. “It won’t be their first watch. They’ll have probably spent a few years following watch blogs and Instagram accounts, and will be looking to invest between £10,000 and £30,000.”

One of his richest clients under the age of 40 has spent in total more than £1m on A-grade time pieces over the past few years.

“Because there’s so much demand from wealthy millennials – particularly for vintage steel sports watches – our older clients are starting to realise that this is where they should be investing too. They’ve actually started copying the younger ones,” Mr Walton said.

What are they buying?
As a result, prices have started to pick up. The sleek design of the steel Patek Philippe Aquanaut 5065 is a favourite with young investors, said Mr Walton. Its price has doubled to around £25,000 over the past 18 months, while the cost of a steel Audemars Piguet Royal Oak 14700 has gone up from £9,000 to £20,000 over the same period. “The most desirable watches can easily sell on Instagram for £50,000 within half an hour.”

Mr Walton was an investor long before he started his horology business. He previously worked in private equity and used to own a number of stocks and shares. “But I sold them all a few years ago,” he explained. “I realised that if I was going to invest, I might as well invest in something I understand.”

It is not just watches that young investors are splashing their cash on. Research has shown that those under 34 are much more likely than other generations to own other ‘alternative’ investments, including art, jewellery and fine wines – and are shunning more traditional assets such as stocks, shares and bonds in the process.

The generational investing gap
For Dr Pete Brooks, a behavioural scientist who works with Barclays bank, much of the reason lies in the financial circumstances this group grew up in. “This is the generation that came of age during the Great Financial Crisis of 2007,” he said. “Seeing the disastrous effects of events like these in your formative years has a lasting impact on what you do with your money and can give people a mistrust of investment companies that lasts a lifetime.”

Barclays found that 25 to 34-year-olds are around three times more likely to invest in fine wines than people aged 35 and above, and twice as likely to invest in art or antiques. Around 10pc of the younger age group had invested in art, while 15pc had invested in wine.

Millennials are getting a taste for wine
Tom Gearing, 32, bought his first investment wine at age 13. “I went to an auction at Christie’s with my Dad and we bought a 12-bottle case of 1959 Domaine de la Romanée-Conti, Romanée-Conti for £16,000 – I was even allowed to hold the paddle,” he recalled. Today, that particular vintage is worth £16,000 a bottle – 1100% more than what he paid 19 years ago.

During university, Mr Gearing started a business selling fine wines to investors which, over time, has morphed into Cult Wines – a wine investment service managing £120m on behalf of its clients.

“We’ve been really surprised by how much interest there is from younger people,” he said. “They tend to invest much more heavily than our older clients: usually around 10 to 15pc of a £1m portfolio.”

Very few of these uber-rich millennials will hold government bonds as their parents or grandparents would have done, Mr Gearing said. “They consider wine to be their safe haven – a low-risk option for balancing their portfolio.” Most, he added, will have money invested in art, jewellery and classic cars too.

Younger investors also tend to be much more engaged with the technical side of things, he said. “They’re so keen to learn. We have a digital platform that allows you to check your portfolio and how the prices of the wines have changed on your phone at any time – they absolutely love it.”

Are these millennial millionaires in it for the money or the passion? According to Mr Gearing, it is a mix. Generally, he said, these young millionaires will already like wine, but at the end of the day, they want their investment to turn a profit.

“Older investors tend to have a bit more wealth so are less fussed if they don’t get a return on their money,” Mr Gearing said. “They just think: ‘Well, if it doesn’t make a return, I can still drink the wine’.”

Investing in a post-crash era
Like Mr Walton, Mr Gearing also comes from a financial background, being the son of an investment banker, and had a near scrape with the City. “I was meant to go and work at an investment firm – but when the financial crash hit my graduate scheme got cut.” That was when he decided to start the wine business.

It was a good time for launching it, Mr Gearing added, as the crisis pushed people away from stocks and shares and towards more esoteric investments.

According to Dr Brooks, this mistrust of financial markets among Britain’s young and wealthy could be here to stay.

“You see throughout history that generations coming of age during an economic crash carry this with them,” he said. “After the Great Depression in America, young people became much less likely to invest in stocks and shares – and this wariness lasted throughout their lifetime.”

Source: The Telegraph

Art AVMs

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Wed, 29 Jan 2020 20:55:00 +0000

Fellow appraiser and Appraisal Foundation ASB member Tim Luke, ISA AM sent me an interesting article from Forbes on fine valuations unis an AVM (automated valuation model). Real estate AVMs have been around for some time, and with technological advances with artificial intelligence there are more opportunities for AVMs to be applied to fine art appraisals. Of course how accurate and how conclusions are reviewed, interpreted and applied are of utmost importance.

Tim pointed out that when AVM search auction databases for comps there are concerns with incorrect reporting or use of sales which may not have been completed. A few years ago when ISA was working with Collectrium (collection management software owned by Christie's) they were attempting some form of an AVM, although it never came to fruition.

I am soon to discuss this topic with an AI art program vendor and an art trend/index developer and hopefully will have more insight on the topic in a few weeks. I will be posting on my discussion, the website and data usage shortly.

Forbes reports

At the RICS WBEF held in New York last May, I was asked by the moderator if an AVM could ever be developed to appraise paintings.

2019 RICS WBEF in New York, panel on AVM's
Panel on AVM's at the 2019 RICS WBEF in New YorkRICS
(Acronyms decoded: RICS=Royal Institution of Chartered Surveyors, WBEF=World Built Environment Forum & AVM=Automated Valuation Model.) With AI all the rage, HR gurus are taking stock of what its impact will be on those of us who are mere wetware.

AVM’s are already infiltrating the world of real estate valuation, but a quick Google search did not uncover any reference at all to an AVM which can appraise your Warhol. Part of the reason, naturally, is that the average building is worth far more than the average painting. Hence, the fees are higher, and the amount which can be invested in R&D is commensurately greater. Yet, there may be another explanation.

Today In: Lifestyle
If you have ever reviewed a real estate appraisal, you would have seen a section marked “sales comparables”. Therein, the appraiser lists the sales of houses like yours, near yours. Most neighborhoods are fairly homogeneous, so the comparable buildings selected are most likely not too different or too far from the subject structure.

Paintings, though, are substantially unique. Sometimes, there are no true comparables whatsoever, or frustratingly, if there is one, the sale took place 32 years ago. The data which personal property appraisers need cannot be located nearly as easily as those for the real property sector. In appreciation of this, it is generally accepted that two art appraisers can disagree by as much as +/- 10% without either being deemed off-base.

I would say, though, that it should be possible to develop an art AVM. The easiest prey would be prints. If Warhol printed 250 examples of his 1969 screenprint Campbell’s Soup “Chicken ‘N Dumplings”, they would all be practically identical.

Andy Warhol, Chicken 'N Dumplings, silkscreen, edition of 250
Andy Warhol, "Chicken 'N Dumplings", silkscreen, edition of 250LIVEAUCTIONEERS
Odds would be high that an AVM would be able to search the art databases and identify numerous recent sales of that very image to use as comparables. All a human would really need to do would be to correct for the condition of the comparables, and, perhaps, the different sale locations and dates. That would mainly be deemed fine-tuning.

As I see it, such an AVM could set the baseline in legal disputes, such as divorce or probate. The expert witness on either side would then have to justify to the court why his/her figure might have deviated from that generated by the AVM. If one appraiser submits a figure which turns out to be 10% less than the AVM’s figure, then minimal justification would be necessary. If the other’s number is 30% greater than the AVM’s figure, then that would call for a lengthy explanation.

Similarly, if the IRS chose to adopt an AVM, estate and donation appraisals could be analyzed by the system to generate a baseline figure. If the appraiser’s number is within +/-10% of the AVM’s, then it could be automatically accepted. If not, the IRS in-house appraisers could then review the appraisal in depth and decide whether or not to challenge it.

Of course, an AVM in any realm is only as good as the data fed to it; (garbage in, garbage out). If the appraiser has misdescribed the subject work in any way, the system will choose the wrong comparables and miscalculate the value. For prints, as noted earlier, most of the details are readily apparent. For original drawings and paintings, though, far more interpretation is required. Is the artist known? If so, is this his typical piece? Is it from his most desirable period? Is it certainly authentic?

Ideally, as a proof-of-concept, a system would first cut its teeth on prints, using machine learning and a feedback loop. The auction realm offers a perfect training ground. Myriad pieces are offered each season, and their ultimate sale prices are easily obtained. The system would appraise each piece when the auction is publicized and then compare its calculated value to the actual sale price weeks later. It could then adjust its algorithm for its errors, and refine the system ad infinitum. From prints, it could move on to sculptures which were cast in editions, and then on to original works of fine art, and then decorative art, gems, etc..

For decades, the vision of an art appraiser was that of a bespectacled, accented gentleman who put his hand to his forehead and magically set a value on the spot.

AVM’s can help bring the field into the 21st C..

Source: Forbes

New Collector Category - Video Games

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Tue, 28 Jan 2020 23:54:00 +0000

Fellow appraiser Marcus Wardell send me an interesting article from the NY Times on collectors of factory sealed video games. This article should be of interest to regional auction houses, estate sale professionals as well generalists appraisers and those who work with household contents. The article seems to note that dealers are having a hard time in keeping up with the prices as they are rising so quickly.

The NY Times reports

Interest in factory-sealed video games has soared in the past year, and collectors have been able to quickly flip the most coveted titles, making a substantial profit.

Vintage baseball cards, antique coins and rare comic books, originally bought for pennies, now regularly sell for millions of dollars, sending enthusiasts in pursuit of the next hot collectible: retro video games.

Interest in factory-sealed video games has soared in the past year, with some companies aggressively targeting collectors from more established markets. The hottest investments are games for the Nintendo Entertainment System, which popularized characters like Link, Mega Man and Mario in the 1980s.

Collectors have been able to quickly flip the most coveted titles, making thousands of dollars in profit and fueling concerns of unsustainable hype.

One collector, Donald Brock Jr., who runs the website Columbia Comics, said he had spent about $50,000 buying vintage video games since his first purchase in March. One sealed N.E.S. game cost nearly $1,500. He had its condition graded, and then sold it for more than $12,000.

The top end of the market has also been invigorated. In September, Eric Naierman, a dentist who had primarily collected sports cards, spearheaded a $1 million purchase of dozens of games, months after video game collectors jointly bought a rare Super Mario Bros. game for more than $100,000. A copy of the original Mega Man recently sold at auction for $75,000.

Collectors say that multiple gold copies of Nintendo World Championships — only 26 were distributed, making it one of the rarest N.E.S. games — have reached the six-figure threshold in private sales.

“You almost can’t pay too much because stuff is going up so fast,” said Josh Hamblin, the owner of SideQuest Games in Portland, Ore., who advises comic book collectors seeking to diversify.

Some longtime collectors are pleased, saying video games are an art form that deserves to be recognized. However, other members of this tight-knit community say the higher prices are exaggerated, even if their own collections are now worth far more, and some have raised ethical concerns.

“Market distortion, both legal and illegal, ethical and unethical, is rampant in the art world,” said Richard Lehun, a founding member of Stropheus, a New York firm that provides legal services for the arts community. “Everyone is essentially trying to game the system.”

In collectibles markets, prices are highest when significance and scarcity overlap. A prime example is Action Comics No. 1, the 1938 issue whose cover features Superman’s debut. There are thought to be about 100 surviving copies, and a well-preserved version has fetched $3.2 million at auction. A copy once owned by the actor Nicolas Cage sold for $82,500 in 1992, $150,000 in 1997 and $2.2 million in 2011.

Intoxicated by the ascent in value of rare collectibles, speculators are eager to find the equivalent in video games while prices are still relatively low.

“It’s something they can break into at this point,” said Valarie McLeckie, who oversees video game sales at Heritage Auctions, a category that Sotheby’s and Christie’s have not entered. “They want to get in on the ground floor of this new collectible.”

The surging values have surprised even longtime collectors, who for years were primarily interested in completing their collections that included arcane titles such as Color a Dinosaur, a game for preschoolers.

Mr. Hamblin said he was ecstatic to spend only $1,000 on a sealed copy of Teenage Mutant Ninja Turtles, even though it would have cost just a few hundred dollars two years ago. Some speculators visit his store, he said, without properly understanding the industry.

“They are just coming in and buying anything that is sealed,” he said. “To the point where I am saying, ‘Don’t buy this, it is not rare at all.’”

A game like Super Mario Bros., which was released 35 years ago, can seem like an odd choice for a collectible. More than 40 million copies were sold, according to Nintendo, and Mario had made his barrel-jumping debut years earlier in Donkey Kong.

But collectors have been charmed by a guide to Nintendo’s “black box” series that details 11 variations of the uniform black packaging for Super Mario Bros., including early copies released in New York and Los Angeles that were sealed only with a round, black sticker.

That guide, published last year by Wata Games, which began grading the condition of game boxes, cartridges and manuals in April 2018, sent people scurrying for a variant that previously drew scant interest. Dr. Naierman, the collector who was part of a $1 million game purchase, said he had obtained 20 sticker-sealed games since March.

“It’s creating chaos in the market,” said Shawn Surmick, who writes a column for Antiques & Auction News. He added, “A lot of these starry-eyed speculators just see dollar signs.”

When Heritage brokered a $100,150 private sale of a Super Mario Bros. game last February, it called it the only known copy with a sticker seal still intact. Heritage also said Wata had given the game a grade of 9.4 out of 10, or near mint condition.

But the sale raised ethical questions among some collectors, who flocked to online forums with complaints of inflated prices. At least two of the five buyers are personally invested in Wata, and the game’s previous owner and a buyer are on Wata’s advisory board. That buyer, Jim Halperin, is also a co-chairman and co-founder of Heritage.

Deniz Kahn, the president of Wata, said that transparency was paramount and Wata employees were not allowed to have games graded by the company or sell those that were.

Several industry observers and parties involved in the Super Mario Bros. sale said it was legitimate, emphasizing a competing six-figure offer for the game and rebutting claims of a cabal artificially driving up the price.

“We certainly thought the publicity was a nice add-on benefit,” Mr. Halperin said. “But I don’t think we would have bought it if we didn’t think it was a good deal.”

If retro video games are successfully portrayed as valuable assets, Heritage and Wata both stand to profit as middlemen in the transactions. The companies’ partnership has helped Wata rapidly compete with Video Game Authority, which has graded games for about 15 years.

Since the six-figure sale, Heritage has auctioned 29 copies of Super Mario Bros. for the N.E.S., ranging from $79 to $19,200. It has sold hundreds of games graded by Wata in the past year, including 13 for more than $10,000 each.

The auction house, which charges a 20 percent commission on video game sales, was projected to generate $500 million in revenue last year, according to the market research firm IBISWorld.

Wata has been overwhelmed with demand since the groundbreaking Super Mario Bros. sale as collectors race to determine the value of their games. The company has successfully targeted comic collectors in particular by using a parallel 10-point grading scale, parading top-tier games at comic conventions and highlighting the first appearance of video game characters.

Mr. Surmick said that Wata brought trust and liquidity into the market but that paying current prices for graded games was risky because it takes years for a market to stabilize.

And surging markets can falter, from tulip mania in the 1630s to the dot-com crash in the 2000s. Those who doubt that video games will retain their newfound value say it is driven by nostalgia that will wane in an era of digital distribution.

When games are graded, they are authenticated and then encased in hard plastic shells to ward off deterioration. A similar process helped accelerate the growth of the comic and coin industries, said Richard Lecce, who buys and sells rare coins and has one of the world’s largest video game collections.

Mr. Lecce, who organized the group of Super Mario Bros. buyers that includes Mr. Halperin, is confident in the investment, trusting that future collectors will care about Mario because the character is embedded in pop culture.

“To me, Super Mario Bros. or The Legend of Zelda are artworks that are far more important than, say, the Mona Lisa,” said Mr. Lecce, who tried unsuccessfully to sell the Super Mario Bros. copy for $1,000,000 in a recent episode of “Pawn Stars.”

But Mr. Brock, the comics collector, urged caution, saying that people entering the video game market need to do their homework because companies like Heritage and Wata have incentives to drive excitement.

“It’s their job to grease the machine and make sure the machine continues to run,” he said, “because the machine prints money.”

Source: The NY Times

Invaluable Hosts Third Global Auction House Summit

noreply@blogger.com (Todd W. Sigety, ISA CAPP) — Tue, 28 Jan 2020 00:03:00 +0000

Auction platform Invaluable is hosting its third Global Auction House Summit in Paris February 3-5. The summit is to "examine the rapidly evolving online art and auction market and identify opportunities for growth."

The theme for this years summit is technology and building winning strategies in the auction market. It is an invitation only event with more than 200 experts epected to attend.

Invaluable reports on the summit

Boston, MA, Jan. 27, 2020 (GLOBE NEWSWIRE) -- Invaluable will convene representatives from the world’s top auction houses in Paris in early February for the third Global Auction House Summit – the only gathering of its kind in the industry - to examine the rapidly evolving online art and auction market and identify opportunities for growth.

The invitation-only event, themed Technology and Transformation: Building Winning Strategies, will be held at The Westin Paris – Vendome from Feb. 3-5.

This is the third time Invaluable – the world’s leading online marketplace for fine art, antiques and collectables - has hosted the Summit and it will be the largest, with more than 200 industry experts attending. The three-day event will feature panels, addresses and interviews with CEOs and leaders of many of the Top 250 auction houses, as well as noted art experts and key influencers from across the art, auction and e-commerce industries.

“We’re proud to host this inspiring event – the only one of its kind – designed to bring auction industry leaders together in the pursuit of innovative solutions to propel our businesses forward,” said Rob Weisberg, CEO of Invaluable. “We know the business landscape that auction houses confront each day is highly competitive, increasingly global, constantly connected and inherently hectic.”

Topics include mega trends in the middle market, expanding auction house digital footprints, navigating art law, the glamorous (and profitable) intersection of art, luxury and retail, preserving cultural heritage in the digital age and the state of the Chinese art market in these uncertain times. Also included will be demonstrations and information sessions hosted by a select industry-leading sponsors. See full schedule here.

The Summit will convene as the global art market seeks to rebound from a slowdown in 2019. One bright spot was the continued growth of online sales.

“At Invaluable, we have auction house partners in 52 countries – many of whom will be represented at the Summit – and buyers in 180 countries. In 2019, a tough year for our industry, the number of sales on the Invaluable marketplace increased by a staggering 17% over the previous year, despite market headwinds,” said Weisberg.

“Nearly 60% of all traffic to Invaluable is now derived from consumers via a mobile device, a number that keeps climbing each year and illustrates the fact that bidders are on the move like never before. Top bidders have come to expect access to the auction room floor despite geographical distance, language, currency or time zone. Global is the new local,” he added.

While only a snapshot in a traditionally slow Q1, January hammer on Invaluable is up 14% year-over-year, driven by strong increases in the sales of collectables, jewelry and furniture. “It’s been a good start to the year and we see it continuing in 2020,” added Weisberg.

Source: Yahoo/Invaluable Press Release