The stock market keeps hitting new heights and 288 new billionaires were minted last year, those with cash are eager to flash it.
For the nouveau riche, the best way to make a statement about their wealth is still through art, leading to a $2.5 billion bumper sales season at the major New York auction houses — more than double last year’s tally when Christie’s, Sotheby’s and Phillips sold $1 billion during the same period.
Billionaires have been chasing trophy works by 20th century heavyweights like Jackson Pollock, Mark Rothko and Constantin Brancusi, leading to stratospheric prices as New York’s art auctions roared back to life. In three hours alone, Christie’s alone sold $1.1 billion of art on May 18.
The year-on-year improvement is stark: Christie’s leads with $1.5 billion in sales, up 116% from $693 million last May. Sotheby’s is up 82%, with $908.6 million in total sales, while Phillips’s $146 million represents a 97% increase.
Fueling the huge demand has been a rare flood of art from prominent estates all hitting the block at once. Key among them were those of media mogul SI Newhouse, beloved philanthropist Agnes Gund, blue-chip dealer Robert Mnuchin, and revered gallerist Marian Goodman. Most of their collections were quickly gobbled up.
“They had extraordinary taste, passion and incredible access to the best-of-the-best in art that America had available,” said Randy Slifka, an Upper East Side financier and collector. “It’s rare to have collections such as these, all in one season.”
Market veterans aren’t surprised by the scramble and competitive bidding to acquire big name artworks.
“A Pollock, a Rothko, a Picasso— these are brand names,” said Alex Rotter, Christie’s global president. “They are like, forgive me, a Ferrari, like a Rolex. They give people confidence.”
Commentators point out the same level of competition to acquire items which come with bragging rights is happening everywhere, such as buying up stakes in sports teams —Houston tech boss Michael Dell buying a stake in the Las Vegas Raiders NFL team and Tom Dundon buying out NBA’s Portland Trail Blazers, to give two recent examples — or snapping up beachfront real estate in Palm Beach, Florida.
“It’s a reflection of a world where wealth is concentrated in fewer hands,” said Jeff Magid, an art collector and Instagram commentator, noting fierce competition for everything and anything rarefied, from trips to space to nuclear bunkers.
“Everything is for sale to the highest bidder,” he added.
This week’s success builds on the Leonard Lauder sale last November, when Gustav Klimt’s “Portrait of Elisabeth Lederer” fetched $236 million at Sotheby’s, the second highest price for an artwork at auction, reversing the downward spiral in the highest price bracket during the previous two years.
“The art world is a lot about optics, and those were really positive optics in November,” said Wendy Cromwell, a New York art adviser. “It signaled to the market that extraordinary things bring extraordinary prices. And it brought out other great estates.”
The biggest of them was the 16-lot collection of Newhouse, which tallied $630 million, surpassing presale estimates and propelling two works into the exclusive $100-million-plus club: Pollock’s monumental 1948 drip painting “Number 7A” which fetched a whopping $181 million and Brancusi’s small bronze head, “Danaïde” (1913), which sold for $107 million.
Two paintings by Rothko flirted with the $100 million mark but ultimately fell short. At Christie’s “No. 15 (Two Greens and Red Stripe)”(1964), reached $98.4 million, a new auction record for the Abstract Expressionist. A few days earlier, Sotheby’s sold “Brown and Blacks in Reds” (1957) for $86 million. Christie’s also sold one of Picasso’s “Homme à la guitare” works for $41 million.
However, it was the Pollock that stole the show and the headlines. Painted in 1948 on a floor of a barn in East Hampton, “Number 7A” is the earliest and largest drip painting by the legendary artist to come to auction since 1961, according to Rotter, Christie’s global president.
“It is with this work that Pollock finally frees himself from the shackles of conventional easel painting and produces one of the first truly abstract paintings in the history of art,” Christies wrote in its description.
In 2000, when Newhouse paid $32 million for “Number 7A,” Pollock’s auction record was $11.5 million, which had been established by Sotheby’s in 1989 for another painting, “Number 8” (1950), according to Artnet price database.
Rotter’s boss, Tobias Meyer, tasked him with accompanying the painting during its delivery to Newhouse. “I wasn’t supposed to leave it out of my sight,” he recalled this week. So, when the painting was squeezed into the elevator, he crouched on the floor as it went up to Newhouse’s spectacular apartment in the UN Plaza, a high-rise overlooking the United Nations.
He’s been sharing the anecdote with prospective buyers this month to highlight the work’s provenance and rarity throughout the decades.
“They love the idea that there was a price of $32 million when I delivered the Pollock to S.I.” Rotter said. “A story like this makes it very real.”
On May 18, Rotter was the one to place the winning bid on behalf of an anonymous client, prevailing in a seven-minute, six-way bidding war at Christie’s Rockefeller Center headquarters. It was a record for the artist, and the fourth highest price for any artwork at auction.
“Collectors are willing to chase unique works with incredible stories,” he said. “When you bring the material, and the confidence at the highest levels is strong, the rest of the market follows, and that’s where we are.
He declined to reveal the identities of the buyers, citing confidentiality. (A representative for hedge fund boss Ken Griffin, the biggest whale in recent years, said it wasn’t him who purchased the Pollock.)
And the sales aren’t just happening in New York auction houses, they’re being driven by US buyers.
“America is the driving force,” Rotter said. “There is not much bidding coming from the Middle East. Asia is still there, but I don’t see them at the super high end now.”
Some of the euphoria has trickled down from the top to lower price levels. Christie’s day auction of Impressionist and Modern art works on paper totaled $21.2 million, the highest result in the company’s history.
A boutique company, Fair Warning, sold a 2012 painting by Banksy, “Girl and Balloon on Found Landscape,” for $17.9 million during a private, single-lot auction at Tiffany’s on May 20. There, a few dozen invited guests, many of them art market insiders, mingled over martinis and black caviar canapes dotted with gold leaf.
Battles also raged in the $1 million to $10 million range, according to Philip Hoffman, head of the Fine Art Group that advises art investors. He had 30 clients bidding in New York this week, but only five succeeded, he said. Among the purchases was a Willem de Kooning painting that hammered at $6 million, although that was the low estimate, he said. Driving the demand is the quality of art which has come up on the block.
“People have abstained from buying for the last two or three years,” Hoffman said.
“They didn’t know what to buy, there was no quality to buy. [Now] people have made a lot of money. The Stock market is high. They are ready to buy at all levels. If they weren’t successful on one lot, they are back on the next.”
For Slifka, the Upper East Side collector, the real question is: What’s the art world equivalent of a coveted beachfront property, and which artists and works now represent the best of the best and have staying power?
“The Pollock may be the best work to come to auction in the last decade, there was never a question that Newhouse and Mnuchin had great collections and superb taste … the market just put a value to manifestations of great 20th century art.”
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