Fair Warning: Lots of Passes, but Sotheby’s Modern Sales Still Bring in $427 Million

Above the fireplace in the Los Angeles living room where the music executive Mo Ostin entertained celebrity clients like Frank Sinatra, Paul Simon and Joni Mitchell were two unusual paintings by René Magritte. The Belgian surrealist was still an acquired taste when Ostin started collecting him in the 1990s, long before the painter started commanding upwards of $50 million in the global art market.

But the artworks certainly found an audience on Tuesday as bidders competed for over 15 paintings from the collection accumulated by Ostin, who died last year, and another 54 lots included in Sotheby’s latest Modern Evening Sale, which helped the auction house realize $427 million in a single night. That figure was below the $500 million that the company had predicted but still the third highest total for a single night in its history, Sotheby’s said.

The lots in the Mo Ostin sale, which carried a pre-sale estimate of $103.3 million to $155.3 million, ultimately brought $123.7 million. The prize was a paradoxical painting from Magritte’s “Empire of Light” series, which sold for $42.3 million with buyers’ fees after the auctioneer spent 10 minutes attempting to rouse higher bids from four collectors who were battling for it. (The artist’s high price was $79.8 million, established a year earlier.)

The 1951 work includes motifs that are synonymous with the artist, such as the juxtaposition of a bright sky with a dark landscape. Another painting completed two years earlier, “The Domain of Arnheim,” sold for $19 million and was inspired by an Edgar Allan Poe story of the same name.

However, the auction lacked speed, and there was consensus among some collectors and analysts in the salesroom that declines in speculative bidding and increases in interest rates were hurting business. After slow bidding on the Ostin collection, Sotheby’s announced that six lots would be withdrawn from the Modern Evening Sale (83 percent of the works sold, but eight works were passed on). It was a long way from this day last spring, when the second part of the exemplary Macklowe Collection raised $246 million alongside $408 million in the Modern Evening Sale.

On Tuesday, “they were struggling more than I would have expected,” Max Dolgicer, a contemporary art collector, said. He came on Tuesday evening to bid on a Picasso drawing in the Ostin sale but ultimately decided against it.

“I have my eye on something else,” he reasoned. “I think there is a lot of cautious bidding tonight.”

The buildup of these sales is highly choreographed for that reason. The number of guaranteed lots, which are essentially sold in advance to buyers who have promised to pay undisclosed minimum prices, was not finalized until close to the sale, indicating that consignors were still attempting to hedge their bets in an uncertain market.

“Buyers in the postwar and contemporary art market were comfortable borrowing against their assets when they had access to capital at a cheap rate,” said Doug Woodham, an art adviser who was previously an executive at Christie’s, explaining that rising interest rates might triple the margins for a collector. “It is making people feel more hesitant to bid.”

Brooke Lampley, Sotheby’s chairman and worldwide head of global fine art sales, said that she had heard similar concerns from buyers. “Money isn’t free right now,” she said. “That plays a role in how people are spending their money and thinking about allocating their assets.”

But there were still moments of surprise. The Japanese American artist Isamu Noguchi set a high benchmark with an outdoor sculpture of granite columns called “The Family” in the Modern Evening Sale. Two collectors fought; the winning price was $12.3 million after buyers’ fees, nearly double the piece’s low estimate of $6 million.

Another highlight of the sale was a rare painting by Gustav Klimt, “Island in the Attersee,” which the Austrian artist finished in 1902. The winning bid for the glittering seaside landscape was $53.2 million, above its $45 million estimate.

“It really shows how much Klimt was at the forefront of abstraction,” Brooke Lampley, Sotheby’s chairman and worldwide head of global fine art sales, said in an interview before the auction, mentioning how the artist had developed the style before Claude Monet’s breakthrough water lily series a couple years later. “Here you see that Klimt was on the same path.”

The path the art market is on remains uncertain, with several auctions left in the week. “There is quietude in the market,” Woodham said, observing that bidding was on the stingier side, with increments of $50,000 rather than the gonzo $10 million leaps of yesteryear. “The market is trying to find equilibrium because buyers are extraordinarily price sensitive.”

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