Ilya Marritz covers business for WNYC.
That Picasso? Worth About as Much as a Fifth Avenue 5-Bedroom
Monday, March 05, 2012
It's long been axiomatic that a slice of pizza costs about the same price as a single ride on the subway. But here's a new economic parallel for New York City: the most expensive apartments changing hands in the city last year fetched about as much money as masterworks by Andy Warhol and Gustav Klimt.
For example, Developer William Zeckendorf paid $27 million for a two-bedroom apartment at 740 Park Avenue last November (the No. 8 most expensive home purchase of the year in New York), almost the same price as was reportedly paid by the Mugrabi family for a 1986 Andy Warhol self-portrait a few months earlier (the No. 7 price paid at an art auction.)
Steven Giachetti, an assistant vice president in the EDC's research department, whose recent report highlights the parallels between the two high-end industries, said he wanted to illustrate the role art auction houses play in the the city’s economy.
He was motivated, in part, by increased reports of record-high winning bids at auction houses.
"I realized that these headline-grabbing figures were quite the norm actually," Giachetti said, adding that the art market rebound really hit him at an auction of works by the artist Clyfford Still, which he attended last fall.
(A Still painting -- "1949-A-No. 1" -- sold for nearly $62 million at Sotheby's in November).
Nevertheless, Giachetti said he was surprised a square of canvas and oil paint can fetch as much money as an apartment overlooking Central Park.
So which is a better investment - art or homes? WNYC asked a real estate broker and an art dealer.
SHARON BAUM - Senior VP and Director of the exclusive property division at Corcoran
(Photo Courtesy of Corcoran)
Does it make sense to you that a Picasso could be worth the same as a six bedroom on Fifth Avenue?
Well, both have a lot in common, especially if you're talking about pre-war apartments on Fifth Avenue. Obviously, there cannot be any more pre-war luxury, six-room luxury apartments on Park Avenue because what there is is what there is. And when you have a Rembrandt or a Picasso, what there is, there is, and there can't be any more. So both of them have a lot in common. Obviously, since I work in real estate and not an art gallery, I am pro-real estate.
Which is a better long term investment?
I can't look into the future and say what the art market's going to do any more than I can look into a crystal ball and know that real estate prices are going to go up 10 percent next year and that the art market will only go up 80 percent. … Many of my clients certainly buy and sell a lot of art, but most of them collect for their own private collection they're not really buying to make money.
So does a taste for art tend to go hand in hand with a taste for expensive real estate?
Most times it does and it can be contemporary art or it can be the masters, but most of my clients for these major apartments are also major collectors. They go to Art Basel, they go to all the auctions. They're there.
For example, I sold the Brooke Astor apartment. Well, Brooke Astor had beautiful art. The people who bought the apartment were a much different age bracket than Brooke Astor, but they're big art collectors.
I know that they lean more to contemporary art.
When an expensive apartment changes hands, does the buyer sometimes purchase the art on the walls?
Never. Oftentimes people visiting a property will say, "Would they be willing to sell any of their art? Would they sell those instead of having them go to auction?" but they never, never, never, ever stay. And usually nothing is for sale because it's either going to family members or it's going to auction.
I have a situation now with a house that I'm selling which has some magnificent art and it will go what the family doesn't keep it will go to auction, to one of the major auction houses. They're all trying to get it and Giacometti sculptures, you know just really wonderful things. The art is more valuable probably than the house because often times it is when you have many, many pieces.
MICHAEL ROSENFELD - Owner of Michael Rosenfeld Gallery
(Photo courtesy of Nicholas Vreeland)
How can a Picasso or a Rothko be worth as much as a six bedroom on Fifth Avenue?
As rare as a six bedroom on Fifth Avenue may be, getting a great Rothko or a Clyfford Still or a Klimt for those who desire such a work - they're even more rare.
This study looks at auction sales. What you do is a little different. How do gallery sales compare?
At the gallery we buy and sell privately. The public is not generally aware of the prices at which we're selling art. At the gallery, there's a certain amount of discretion which the collectors and museums count on.
So it's possible that you or your colleagues in the gallery world sold paintings last year in the same range as the auction houses - say $40 million or $60 million?
It's very, very possible. And very likely that that's the case.
The people buying expensive apartments are often the same people making big art purchases. Do you ever make house-calls to help people furnish their big new apartments?
That is the dream of the gallery owner is for the collector who has a new apartment to ask me to come over to help them look at the space to look at the walls to look at art, and to place art on those walls.
What's interesting is to look at the addresses. I have had that experience in the past year at 15 Central Park West as well as 740 Park Avenue, and the Time Warner Center and 834 Fifth Avenue. Isn't that interesting? If there are 10 addresses on the list, I've spent time at five of the addresses in the past year, helping them acquire paintings and sculptures.
So which is a better investment, art or real estate?
I think the art has been a better investment especially if one goes off the list of artists like Clyfford Still, Warhol, Rothko, Picasso, Bacon, Monet. I mean there are countless other artists whose works have increased tremendously in value in the last 10 years.
Very often people will be in the gallery talking about, should they buy this painting, or should they buy this house?
What do you tell them?
As a matter of fact, I'd rather have them buy the apartment. I'm always thinking long term. They'll have more walls!