Whitehot Magazine

February 2011: February Art Market Report

The art year calendar truly begins in September and ends just before June’s early summer vacationings, however the official new year season also marks a set of beginnings and endings, and 2011 in no exception. Several trends define the current psychology and economics in the art world where secrecy and transparency remain uncomfortable bedmates.

 

 This month, New York-based dealer Thomas Von Lintel of esteemed Von Lintel Gallery, kindly provides some insight on the intricacies of the art market.

Shireen Lohrasbe: ArtTactic recently reported that the US and European contemporary art markets saw an increase of 11.6% in sales during the last 6 months of 2010. They also stipulated that thousands of new speculators (to be distinguished from genuine art collectors), will enter the international art market in 2011. From your perspective, have you noticed an increase of burgeoning collectors approaching you and your artists?

Thomas Von Lintel: The figures that they are talking about refer only to auctions based in the very high-end. We read everywhere that art is the place to invest funds. However, if you look at most art funds, they do not work; they cannot work because the fees are extraordinary. So, these figures are true for the higher end where everybody is chasing museum pieces –those A+ works with ready markets and recognition. It’s very different for the market I deal in, which is with established artists that are not well known names outside of the artworld. Our segment has actually shrunk in recent years because of a lack of cash, but it looks like its picking up again. We deal with people who aren’t the super wealthy but people who are well-off by most standards. But when you are not making money from your investments or when you are not able to find new ones, then it becomes very difficult to justify buying art. For instance, a lot of people are involved in real estate and in the past couple of years it has been difficult for them to find new deals because they cannot borrow money. There is a lot less spending money. And most of the people that we sell to, they buy the work because they love it. We rarely see speculators, which is why I like being in this segment. 

SL: It does make sense that speculators would invest in the typical names that we see in museums and at auction. It also appears though that there are many people entering the scene of collecting art regardless of potential investment. Do you believe that art has become a desirable commodity, apart from its monetary value?

TVL: I think the art market has definitely exploded in size. It has become much bigger. Now typically, the idea that art is an investment is something that is understood. You don’t have to convince people of that, if you were trying to convince them. It’s also become very fashionable. But many people have realized that it is easy to buy art but not easy to sell art. In the crazy years of 2006 and 2007, people bought a lot of stuff. And then they got into trouble and tried to sell it –that’s when they found out whether or not their investments paid off. After those experiences, many of them have backed off.

SL: It is interesting that art, an aesthetic luxury, has exploded in mainstream culture. Is buying art equally trendy in actuality?

TVL: I think at this level, it is the willingness to spend money. Last year, it was very difficult from April to October. Then it started to pick up at the end of the year and is much livelier now in January.

SL: And do you think that now that we’ve been in the recession for a couple of years, people’s spending habits are starting to loosen up?

TVL: People are becoming a little bit more comfortable. The whole European situation is not so doom and gloom anymore. And you have a typical scenario where people get bored of not buying. I don’t know if you want to call it ‘pent up demand’ but I think this is what happens. People are buying again because they do actually love it.

Von Lintel Gallery opened in New York City in the fall of 1999 after seven successful years operating out of Munich. The interplay of painting and photographic media is a cornerstone of the gallery’s program, which includes an extensive roster of reputable artists whose works have been placed in various collections and institutions of international acclaim. Von Lintel Gallery strives to present conceptually engaging contemporary art, and has established a loyal following of collectors, critics, and connoisseurs. For more information please visit: www.vonlintel.com 

 

Domestic Conditions

  • Thousands of non-profits have emerged over the past two years amidst the current recession. The 2010 National Arts Index shows that the non-profit sector, comprised of over 100,000 organizations, remains mostly in the red. Furthermore, The National Endowment for the Arts is in danger of being cut funding if Republicans are voted into office next term, which paints a bleak future for public arts programming.
  • In comparison, the US for-profit segment of the arts sector is in a gradual state of recovery. The health of the art fair circuit began with the success of Art Basel Miami Beach last December, which far surpassed 2009’s dreary sales. Closer-to-date, LA Arts Month and Art Palm Beach have also attracted thousands of art aficionados.
    • The 2011 edition of LA Arts Month which ran January 13-30, branded itself as a world-class cultural event playing host to several art fairs including: The Los Angeles Art Show, Art Los Angeles Contemporary,and Photo L.A., with accompanying participation from The Getty Museum and Los Angeles County Museum of Art (LACMA). The event garnered big numbers in terms of audience size and sales with numerous public performance art pieces –a visual medium that has gained steady momentum on the Westcoast over the past decade.
    • Art Palm Beach (Jan 20-24) too broke record numbers this year. A steady fixture on the South Floridian contemporary art scene for over a decade, the fair drew in thousands of international visitors to view over 75 established and emerging galleries representing more than 1000 artists.
    • VIP Art Fair, co-founded by James Cohan of James Cohan Gallery debuted January 22-30. The online fair launched with an impressive roster of participating galleries under heavy promotion but failed to fully deliver. Major traffic and technical difficulties resulted in disappointed clients and relatively lackluster sales. Lessons learned: the 2012 edition should be a smashing hit.
    • Only a month away, the Armory Show –New York’s premiere art fair –has shifted its program. This year, the fair includes an extensive Central and South American slant called Armory Focus: Latin America to coincide with the commissioning of Mexican artist Gabriel Kuri.
  • George Condo’s reign of success continues with his newest collaboration Mental States –a solo exhibition at New Museum that includes drawings, paintings, and sculptures from 1982 and onward. Thus far, the show has received outstanding reviews from The New York Times’ Holland Cotter, Wall Street Journal, Arrested Motion, Artforum, and The Huffington Post. This marks the first time in the past few years that the museum has put on a show without controversy or questioning.
  • The latest set of auction sales show a strong US market for Old Masters. Christie’s presented mostly second-tier works resulting in only two thirds sold, while Sotheby’s showed an impressive selection with several records being broken including a Titian painting and works by Vernet and Bruegel. The combined results reflect the somewhat fickle (albeit reasonable) behavior of buyers in the present economy. For a comprehensive description of both sales’ highlights, visit Old Masters New Perspectives Arts.

 

Global Trajectories

  • 2010 proved lucrative for both main auction houses in terms of worldwide sales. Christie’s achieved record highs in its 245-year history, seeing increases by 53% in global sales and 39% in private sales, accumulating a total of over $5 billion. Sotheby’s dealt $4.3 billion in sales last year–the $1 billion discrepancy between the competing houses remains unclear. Some speculate that Christie’s which operates as a private company under the helm of French fashion luxury brand billionaire Francois Pinault, is able to bypass many regulatory procedures that Sotheby’s, a public company since 1988, must abide by. Regardless, the newest sales figures indicate that collectors are now spending more on art at auction than pre-recession.
  • Art fairs too are boding well on the international front, especially in Asia and the Middle East. Art Stage Singapore made its debut January 12-16. The fair’s director Lorenzo Rudolf, former founder of Art Basel Miami Beach believes its inaugural triumph is in part due to its location, which houses a balanced ‘exchange and confluence of ideas between East and West.’ The following week, India Art Summit (IAS), the nation’s modern and contemporary art fair ran January 21-23. The third edition of the fair included 84 galleries showing over 500 artists from 20 countries including Australia, France, Germany, Korea, Japan, Switzerland, UK and USA. The summit’s success is in part due to rising interest in art as a viable investment tool as India’s economy expands.
  • Similar to India, China’s economy is growing exponentially, therefore counterfeits are flooding the Chinese and Indian art markets –a sign of strength in their value (as the saying goes, ‘imitation is the sincerest form of flattery’). These markets are robust enough to no longer be considered emergent, and neither are their collectors. Rather, Chinese and Indian art collectors continue to boost their own respective markets as well as those of other countries, further heightening international bidding wars at auction.
  • The newest markets are those of Romanian and Turkish art. According to Artmark, Romania’s art market doubled in popularity in 2010 (mostly from interest in the US and UK). Similarly, Turkey’s market erupted last year with the successful fifth installment of Contemporary Istanbul last November.
  • Over the past month, two new art funds have emerged. A Parisian company launched Art Exchange that enables investors to buy and sell shares in modern and contemporary artworks. And last week, NBD PJSC –the largest bank in the United Arab Emirates created a fund with Fine Art Fund Group, set to double-increase in value incrementally for ten years. The art fund trend is pressuring private banks to create their own, including Deutsch, in order to meet escalating demand.
  • Cairo’s political protests has led to looting landmark buildings including the Egyptian Museum, which is now guarded by military tanks. Thousands of people charged the entrance last Friday, damaging a statue of King Tutankhamun that luckily can easily be repaired.
  • The New York Observer published the 50 Top Art Collectors worldwide which features mostly financiers, hedge funders, and industry magnates, many of whom are already household names.

Latest Ventures

  • Technology has officially infiltrated the museum world with the launch of the Google Art Project. Comparable to the Youtube Biennial partnership with the Guggenheim Museum, this collaboration applies ‘tools of the cybersphere’ to museum programs. Here, Google introduces its smart navigation systems to partner institutions, enabling users to access and navigate museum halls online with the precision of the naked eye and the ease of a mouse-click.
  • Due to launch in Spring 2011, Artsy is an online user experience, the Pandora of the fine art world, for art lovers. Also powered by Google its financial backers include Larry Gagosian and Dasha Zhukova (girlfriend of Russian megacollector Roman Abramovich).
  • e-flux continues to grow. As an invaluable resource, the website offers information on internationals exhibitions listings and happenings, global competitions, and course offerings by prestigious schools around the globe.

    Title Transfers
  • The former director of the Solomon R. Guggenheim Foundation Thomas Krens has stepped down as the leading consultant (via his consultancy Global Cultural Asset Management) for The Guggenheim Abu Dhabi, due to open in 2012.
  • As of last month, Lindsay Pollock, one of the art world’s most reputable journalists, has been named the new editor-in-chief of Art in America, owned by megacollector Peter Brant’s Brant Publications. Her blog, Lindsay Pollock: Art Market Views continues to publish relevant posts on the international art market.
  • Melody Kanschat, the president of LACMA, will be stepping down this May. Kanschat has served the museum for over twenty years, overseeing its expansion, and serving as an invaluable resource to a polarized institution. Fortunately for the museum, its director Michael Govan (formerly of Dia Art Foundation in New York) recently renewed his contract for another six years.

Reading Suggestions:

Last month VIP Art Fair Director Noah Horowitz released Art of the Deal: Contemporary Art in a Global Financial Market. As an expose on the art market, the book examines the relationship between art and money beyond basic observation. His experiences and expertise offer a unique account into the complexities of artist-dealer-advisor-collector-curator-auction house-museum-gallery dynamics under current economics.

*The Monthly Art Market Report serves as a summary of the global art market to accompany Whitehot Magazine.

Shireen Lohrasbe

Shireen holds a BBA in Design & Management from Parsons The New School for Design and an MA in Art Business from Sotheby's Institute of Art, New York. She has contributed to several online publications including Art Observed, Quintessentially Art, and Whitewall Magazine. Shireen is a regular art market contributor at Whitehot Magazine.

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