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“Suprematist Composition” (Kazimir Malevich, 1916) to be sold in May

Loïc Gouzer, Christie’s Co-Chairman of Post-War and Contemporary Art, has announced that he will be selling the painting “Suprematist Composition” (Kazimir Malevich, oil on canvas, 1916) in May. Estimate: $70 million.

“Suprematist Composition” was last sold at Sotheby’s on 3 November 2008 by the heirs of the artist (after being in the collection of the Stedelijk Museum Amsterdam for several decades). Art dealer David Nahmad purchased the painting for US $60,002,500.

Mr. Gouzer is confident of the art historic, and current market, value of this work. “‘A work like this one should be the corner stone of every major collection or museum and if the market was indexed to the art historical importance of works, then this should be a billion $ painting (although we as specialists have to sadly take into account the laws of gravity and the estimate will be in the region of $70m).'”

Sixth sense matters. “’I relate it a lot to my spearfishing—you don’t know why, but you know that if you dive now the big fish is going to come. When you’re at the surface, you don’t see anything, but you just have this instinct that it is going to happen. In art, it is the same thing—this instinct sometimes that I know a painting is going to move.’”

Company matters too. “’If you start putting works around another work, they give each other meaning. Each of the works are in dialogue, and they help each other.'”

 

See:

“Loïc Gouzer’s $70m Malevich for May,” Marion Maneker, Art Market Monitor, 10 April 2018

“The Daredevil of the Auction World,” Rebecca Mead, The New Yorker, 4 July 2016

Sotheby’s “Impressionist & Modern Art Evening Sale,” Lot No. 6, Kazimir Malevich, “Suprematist Composition,” 3 November 2008, New York

 

#art #artmarket #kazimirmalevich #christie’s #loïcgouzer #russia #suprematism #suprematistcomposition #modernism #abstraction #geneva #switzerland #vienna #austria #brittany #france #sothebys #davidnahmad #luxury #beijing #shanghai #hongkong #taipei #seoul #jakarta #singapore

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art, real estate, luxury, & global risks

“Humanity has become remarkably adept at understanding how to mitigate conventional risks that can be relatively easily isolated and managed with standard risk-management approaches. But we are much less competent when it comes to dealing with complex risks in the interconnected systems that underpin our world, such as organizations, economies, societies and the environment.

“There are signs of strain in many of these systems: our accelerating pace of change is testing the absorptive capacities of institutions, communities and individuals.

“When risk cascades through a complex system, the danger is not of incremental damage but of “runaway collapse” or an abrupt transition to a new, suboptimal status quo.”

See: “The Global Risks Report 2018, 13th Edition” | World Economic Forum (WEF); Strategic Partners: Marsh & McLennan Companies, Zurich Insurance Company; Academic Advisors: National University of Singapore, Oxford Martin School, University of Oxford, Wharton Risk Management and Decision Processes Center, University of Pennsylvania

#art #artmarket #collectionsmanagement #data #analytics #risk #riskanalysis #riskmanagement #riskmitigation #climaterisk #insurance #insurancerisk #realestate #commercialrealestate #culturalrealestate  #culturalheritage #luxury #resilience #CO2

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art, real estate, luxury, & billion-dollar storms | the new normal?

The superstorms and wildfires of 2017 cost the US $306 billion.

As the temperatures of the oceans rise, the increasing temperatures will increase how strong hurricanes can become.

As global temperatures continue to rise, things will get more costly.

The new normal?

There are proactive steps you can take to protect and enhance the value of your tangible assets.

See: “Billion-Dollar Storms: Is This the New Normal?” | Deborah Acosta, The New York Times, 29 January 2018

#art #artmarket #collections #collectionsmanagement #artrisk #insurance #insurancerisk #realestate #commercialrealestate #culturalrealestate #realestaterisk #GRESB #GlobalRealEstateSustainabilityBenchmarks #climaterisk #financialrisk #CO2 #resilience #luxury #smartluxury

 

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art, risk management, & “rolling disasters” as the new normal

There is worry in the insurance industry that “rolling disasters” may become the new normal, the effects of climate change that many scientists believe have resulted in dryer conditions in the west coast and more intense hurricanes in the east coast. “Climate change is a great concern to the art insurance industry, particularly because of the hurricanes we are seeing,” Quinn said. Both AXA and Chubb are active in promoting research in climate change, recognizing that catastrophic natural events may prove to be an annual occurrence.

Insurers are concerned especially over works of art in private homes.

Insurers in areas such as California may seek to limit their risks. The extent of the damage in regions of California affected by the recent wildfires, for instance, may well increase the cost and limit the availability of fine art insurance.

See:

“As Natural Disasters Loom, What You Should Know About Insuring Your Art” | Daniel Grant, The Observer, 18 January 2018

#art #artmarket #collections #collectionsmanagement #insurance #fineartinsurance #climaterisk #risk #riskmanagement #fire #wildfire #hurricanes #flooding #risingseas #luxury #smartluxury #resilience #realestate #CO2 #H2O

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issues of condition ・ too complex to be explained?

Extraordinary that there may be ” … a consensus that issues of condition, and the work of conservators, are too complex to be explained to gallery visitors as a matter of course” (Burlington Magazine, as reported by The Art Newspaper).

Physical condition is a fundamental component of value of tangible assets, inclusive of works of art, buildings, and houses.

Neither the art market nor the real estate market are “hermetically sealed,” or entirely self-sufficient, existing apart from condition, as some believe and might like to believe.

See:

“How to identify a wreck” | Bendor Grosvenor, The Art Newspaper, 18 December 2017

#art #conservation #conservators #connoisseurship #collections #collectionsmanagement #condition #value #artmarket #tangibleassets #luxury #smartluxury #urbanluxury #architecture #design #engineering #resilience #CO2 #realestate #commercialrealestate #culturalrealestate

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Leonardo’s ‘Salvator Mundi’ sells for US$450,312,500, makes auction history

Breaking (smashing through) auction records, Leonardo da Vinci’s “Salvator Mundi” (oil on panel, painted circa 1500) has sold today at the Christie’s Post-War and Contemporary Art Evening Sale in Manhattan for $450,312,500 (hammer price plus buyer’s premium, net of any applicable fees).

The New York Times quotes art advisor Todd Levin as saying, “This was a thumping epic triumph of branding and desire over connoisseurship and reality.”

Alan Hobart, director of London’s Pyms Gallery, observes, “It’s been a brilliant marketing campaign. This is going to be the future.”

See:

Post-War & Contemporary Art Evening Sale | Christie’s, New York, 15 November 2017

“Leonardo’s Salvator Mundi makes auction history” | Christie’s, 15 November 2017

“Leonardo da Vinci Painting Sells for $450.3 Million, Shattering Auction Highs” | Robin Pogrebin and Scott Reyburn, The New York Times, 15 November 2017

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art-market disruption & the brick-&-mortar gallery

In a time of disruption of the art market by auction house and online agents, global accumulation of wealth at the high end, and growth of the world’s contemporary art market (21 times between 2001 and 2008), Belgian investment banker and art connoisseur/collector Alain Servais believes in the brick-and-mortar model of the art gallery.

In his opinion, a brick-and-mortar gallery, like a museum or an art biennale, is where works of art look best. Galleries are a “right location” and a “right context” for works of art. “There is an aura to the work of art in the right location and the right context, which nothing replaces.”

Mr. Servais provides insight into his collecting and offers his thoughts as to how the gallery could well evolve.

Why collect?

“I don’t believe that one decides to become a collector, but rather that you are or you are not. And more generally, collecting is more than acquiring works of art. It is a way of living, a way of thinking.”

“To express myself. Adding my “sentence” around the “words” created by the artists. To share new ideas, questions, doubts, and surprises. To learn about myself and the world I am living in, so to open my mind to other options. To participate in the constitution of the history of the art of today. To feed my insatiable drive to learn what is not taught. To think outside of the box.”

“Finally, art must surprise me, challenge me, open up my mind and heart following the definition that I heard many years ago from Mera Rubell: “Art is a language which opens your heart to the Other.”

How does he collect?

In “constant conversation with art history, because when you look with connoisseurship you can find people who are completely forgotten, disregarded, or underestimated.”

How should the gallery model evolve?

The goals of the gallery are to court collectors, sell artists’ works, and give priority to the artists and to the art.

What must galleries do to evolve well?

reinforce legal and best-practices infrastructure

stabilize the artist-gallery relationship

balance contracts at all levels of the industry

provide more transparency

on pricing: “there are growing conflicts of interest between artists and gallerists. Sometimes what is in the interest of the gallery is not in the interest of the artist. For example, pricing policies. How fast do you want to raise the price?”

on the gallery-museum relationship, “what’s dubious about the gallery system? One thing is the relationship between the museums and the galleries. Right now only the wealthy galleries can get their artists work into museums because one of the problems is: who can produce the works? Who can put the money up front for massive pieces for exhibitions and biennales?”

develop multiple exhibition strategies

multiple exhibition spaces

select art-fair participation

space exchanges in different cities

pop-up exhibitions in dedicated spaces

cooperative events with artists and peer-group galleries

 animate with intellectual discourse

“art spaces need to be “animated” – with talks, conferences, and events

this will serve to enable meeting spaces – forums for exchanges – between artists, galleries, dealers, curators, collectors, and other stakeholders

See:

“Interview with Alain Servais” | BMW Art Guide

“Collector Alain Servais on Why Galleries Should Act Like Luxury Brands to Survive the Internet” | Alain Servais, Artspace, 27 December 2016

“Collector Alain Servais on Insider Trading in the Art Market, “Blood-Sucking Leeches,” and Why We’re Now Just the Fashion Industry” | Andrew M. Goldstein, Artspace, 23 May 2015

“Art in the shadow of art market industrialization” | Alain Servais, NYAQ/LXAQ/SFAQ International Art and Culture, 10 November 2014

#art #artmarket #smartluxury #luxury #artcollecting #collectors #collections #connoisseurship #AlainServais #museums #galleries #brick-and-mortar #auctionhouse #disruption #finance

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“blockage” & the valuation of damage to art for an insurance claim

Ronald D. Spencer, Chairman of the Art Law Practice at the New York law firm of Carter Ledyard & Milburn LLP, addresses the issue of the valuation of loss or damage to art for an insurance claim. He specifically addresses the use of, and questions the appropriateness of the use of, “blockage” and “blockage discounts” as applicable standards for interpreting the loss valuation provisions of an insurance contract.

The insurance coverage amount is the maximum amount the policy will pay. This amount provides the basis for calculation of insurance premiums. Most insurance claims do not involve claims for the full coverage amount.

The methodology used by the insurer to value a damage claim is a relevant variable for the insured. Most art insurance policies are vague, however, on the valuation method, “providing, simply, that in the event of disagreement on the value of the loss, the insured and insurer will each retain their own appraisers, and if the appraisers do not agree on the value of the loss, the dispute is to be submitted to an umpire or arbitrator, whose decision will be final.”

New York’s Bruce Silverstein Gallery suffered loss on October 29, 2012 caused by flooding during Hurricane Sandy. The gallery had an “All Risks Fine Art Dealers Floater” insurance policy with a “Basis of Valuation” provision stipulating that “consigned property shall be valued at the Agreed Net Consigned Value Plus 10%.” The concept of “blockage” was applied by the umpire representing the gallery’s insurance company. This was the first time the concept of “blockage” for art sales, which first arose in 1972 in the context of art valuations for estate tax purposes, was applied to an art valuation for purposes of calculating a loss for an insurance claim.

When valuing the loss of many artworks, the concept of “blockage” values works as they could be sold on one particular date, the date of the disaster (or death, in the framework of estate sales) on which the loss takes place. Blockage discounts the present value of the works of art based on future streams of income from sales over the period of time it would require to sell the art.

The application of blockage is considered to be consistent with USPAP Standard 6 which provides that when a large mass of property is to be valued as of a specific date, the appraiser is required to take into account that the value of the whole may be different from that of the individual parts.

Mr. Spencer observes that “by choosing to apply a blockage discount to an insurance loss valuation, an umpire, in effect, is deciding that the insurance loss should be determined by the price a bulk buyer of the art at the date of loss would be willing to pay.”

He observes, further, that “the art owner should understand that the result of a blockage discount for the owners’ insurance claim is that the more art the owner has lost, the less the insurer will pay per item—the larger the volume of art lost, the greater the blockage discount for each piece.”

See:

“Think Your Art Is Adequately Insured? Here Are a Few Insider Strategies to Help Minimize Your Risk” | Ronald D. Spencer, artnet.com, 8 September 2017

#art #artmarket #artcollections #collectors #galleries #insurance #fineartinsurance #blockage #blockagediscount #risk #hurricane #Sandy #Harvey #Irma #NewYork #Houston #MiamiBeach #appraisals #valuations #finance #tangibleassets #contractlaw

 

 

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artists & collectors: develop a straightforward emergency plan

Develop a straightforward emergency plan. This advice for artists and collectors is suggested by Anne Rappa, Senior Vice President, Fine Art Insurance, with Huntington T. Block, the oldest and largest managing general underwriter of Fine Art Insurance in the United States.

Such plans are created based on very simple pieces of information. Such information includes contact information for conservators and art storage facilities and assessments of needed physical protections. Gather the information together and write it down.

Isaac Kaplan of Artsy writes: 

“Anne Rappa, senior vice president with fine arts insurer Huntington T. Block, urged anxious artists and collectors to look to museums for guidance, namely by developing a straightforward plan—such as compiling conservator or art storage facility contact information and assessing what physical protections are needed for the work. And, she stressed, be sure to write everything down.

“’When you use the words ‘disaster mitigation’ or ‘disaster planning,’ it sounds complicated,’ Rappa said. “But those plans are created based on very simple pieces of information that are culled together and put in one place. It’s the advanced thought that is so important.”

“One simple tip, she said, for artists and art owners facing water damage: Buy some blotting paper.”

See:

“Miami Artists and Museums Brace for Hurricane Irma” | Isaac Kaplan, Artsy, 6 September 2017

#art #artmarket #insurance #fineartinsurance #Irma #HurricaneIrma #Miami #Houston

 

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Irma, Art, & Hurricane Preparedness in “South Florida’s Gold Coast”

Miami and Miami Beach are home to many significant collections of art.

Art Basel Miami Beach, the largest contemporary art event in North America showing about $3 billion in works, has been situated in Miami Beach since 2002.

Some of the works of art are housed in residences maintained in any of the more than 400 luxury condo towers that have been developed since 2011. Some are kept in single family homes. Of course, works of art are also to be found housed in museums, both public and private, and in cultural centers.

Marion Maneker of Art Market Monitor, writing from the 2017 Global Auction House Summit presented by Invaluable, reports:

“At the Invaluable Auction House Summit in Boston, Thomas Burns from Fortress Fine Art Storage and Simon Hornby of Crozier both addressed the problems with hurricane preparedness in South Florida’s Gold Coast.

“Burns says his teams have been working all week to move their clients art into Fortress’s facility and prepare the building for an unprecedented blow. “Starting Tuesday we were inundated with clients who were completely unprepared,” Burns said. It turns out major works are in place without insurance and the insurance companies have placed a moratorium on new insurance in the area this week.

“Fortress has a program that allows collectors to put their works in storage in June when they leave the area. The big question is how many have had their works moved back to the beach houses so early in the season.

“Hornby pointed to the fact that art insurance carriers were slow to engage these kind of hurricane preparedness programs waiting until this Tuesday to call for logistical support. By then, it was already too late to add capacity amid the jammed traffic and fuel shortages caused by the massive evacuation taking place.”

Meanwhile, workers at the Faena Hotel Miami Beach have been working to fortify the bullet-proof glass that protects Damien Hirst’s life-size, gilded with 24-karat gold sculpture of the skeleton of a mammoth. Entitled “Gone But Not Forgotten” (2014), the sculpture was acquired at auction in 2014 for $15 million by Ukrainian-American Len Blavatnik. “Gone But Not Forgotten” was then installed in the garden of the Faena Hotel Miami Beach ahead of the opening of Faena Forum in 2016. Mr. Blavatnik is owner of Warner Music Group and a partner, with Argentine entrepreneur and developer Alan Faena, in the Faena Forum.

Mr. Hirst explains the sculpture of the mammoth as “an absolute expression of mortality, but I’ve decorated it to the point where it’s become something else, I’ve pitched everything I can against death to create something more hopeful.”

“The mammoth comes from a time and place that we cannot ever fully understand. Despite its scientific reality, it has attained an almost mythical status and I wanted to play with these ideas of legend, history and science by gilding the skeleton and placing it within a monolithic gold tank. It’s such an absolute expression of mortality, but I’ve decorated it to the point where it’s become something else, I’ve pitched everything I can against death to create something more hopeful, it is gone but not forgotten.”

See:

“A Miami Transformed by Wealth Braces for the Storm” | Michael Smith and Katya Kazakina, Bloomberg, 8 September 2017

“Irma Threatens Art Spread Throughout South Florida Homes” | Marion Maneker, Art Market Monitor, 8 September 2017

“Culture’s a carnival for opening of dazzling Faena Forum” | Andres Viglucci, Miami Herald, 25 November 2016

“Hirst’s golden mammoth on display at Faena Hotel Miami Beach” | Damien Hirst.com, 8 December 2015

“Len Blavatnik buys Damien Hirst work for $15M at amfAR gala” | Emily Smith, Page Six, 23 May 2014

#Miami #MiamiBeach #Irma #HurricaneIrma #preparations #insurance #art #artmarket #artstorage #FortressFineArtStorage #Crozier #ArtBaselMiamiBeach #Faena #FaenaForum #AlanFaena #LenBlavatnik #DamienHirst #GoneButNotForgotten