The global art market generated sales of about $65 billion in 2016 according to the TEFAF Art Market Report 2017.
The growing, global network of facilities to store art now generates revenues of over $1 billion a year. Many of these spaces serve multiple objectives – including security, environmental protections, and trade: Sto
- security
- video surveillance
- retinal scanning
- space | collectors have too much to keep at home
- protection
- climate-controlled environments
- fire-resistant walls
- air-filtration
- flood control
- LEED and BREEAM building certifications
- investment purchases
- tax benefits
- tax-suspended transport to and from galleries | as long as works of art return to storage no duty is payable, even if ownership of the art has changed
- “1031 exchange” friendly
- gallery inventory between shows and art fairs
- storage of art taken by banks as collateral against loans
- viewing rooms that can be rented on a more permanent basis | in-house, private sales and transfers of ownership
- passport free access (freeports within airport perimeters)
Simon Hornby, the president of Crozier Fine Arts, estimates that 80% or even more of all the world’s art is in storage at any one time.
The art storage business has doubled in size in eight years and continues to grow.
“Until about ten years ago, Modern and contemporary art collectors were mainly made up of art enthusiasts and amateurs, they had a real passion, spending their money on what they liked; they collected in order to simply enjoy the work in their home environment. Today you have to work with an increasing number of art funds or speculators buying art for investment. Art buying has become accessible to a much larger audience than before and is considered an asset. The result of this is that more work sleeps in warehouses rather than hanging in collectors’ homes.”
Stephane Custot, Waddington Custot Gallery, London
“In the last year, I only physically saw one piece of art that I negotiated. Everything else was bought and sold via jpegs and remained in storage. It was all for investment.”
New York dealer and appraiser
In order to protect the assets, moreover, built environment investment is attempting to keep up with the evolution of demand, including security and environmental protections.
A state-of-the-art storage facility with “foreign trade zone” (FTZ) status (a freeport), ARCIS Fine Art & Collection Care, is under construction on Manhattan’s West 146th Street. Developed by Cayre Equities, the project has taken two years and over $40 million. Executive Director Tom Sapienza and Tom Lay, both formerly with Crozier Fine Arts, were recruited by art collector, real estate developer, and Crozier founder Ken Cayre to manage the project.
The five-story, 110,000 square foot is scheduled to open next month (July 2017). ARCIS is Latin for “fortress”. The facility is designed and engineered to provide and enhance both environmental and security protections.
With the objective of constructing a museum-quality, sustainable, state-of-the-art secure building, Sapienza and Lay took crash courses in thermal dynamics and consulted with the professional services branch of the Van Gogh Museum in Amsterdam. Works of art will be scanned as they move through the building. State-of-the-art air filters are installed; air will change three to six times an hour. LEED and BREEAM certifications are to be achieved for the building.
See:
“TEFAF’s 2017 Art Market Report” | Marion Maneker, Art Market Monitor, 6 March 2017
“TEFAF Art Market Report 2017” | Prof. Dr. Rachel A.J. Pownall, TEFAF Chair in Art Markets, The European Fine Art Foundation, March 2017
“Where does all the art go after a fair?” | Georgina Adam, The Art Newspaper, 16 June 2017
“Picasso Finds Possible Digs in Harlem $2.5 Billion Art Port” | Katya Kazakina, Bloomberg, 2 March 2017
“Will New York Get Its Own Freeport for Art? ARCIS Plans a Tax Haven in Harlem” | Eileen Kinsella, Artnet, 2 March 2017
“One of the World’s Greatest Art Collections Hides Behind This Fence” | Graham Bowley & Doreen Carvajal, The New York Times, 28 May 2016
“About Foreign-Trade Zones and Contact Info” | U.S. Customs and Border Protection, U.S. Department of Homeland Security
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