The Financial Times takes a look at the burgeoning art storage business. Alison Gregor turns that into a fascinating tour of the collector’s side of the art boom–even as it sets up for a lengthy hibernation. Where will all of the art go in a recession? Storage or will the increasing circulation of art continue?
A burgeoning fine art market saw sales surpass $40bn in 2007, which was a catalyst for the growth of a fine-art storage and logistics industry. Even though sales might slow with the financial crisis, and indeed, art collectors will be watching forthcoming auctions with trepidation, the fine art being bought and sold – and which does not make it into museums, galleries, corporate offices or homes – must be stored somewhere. This is a task that involves a high degree of specialisation.
Besides cataloguing, packaging, shipping and installing the art works, fine art storage facilities house them for long periods in crates inside vaults controlled for such factors as temperature, humidity and light. The warehouses also have viewing rooms where pieces can be bought and sold, photographed, assessed or repaired. [ . . . ]
There are about 100 to 125 top-notch fine art warehouses worldwide, according to Bob Crozier, founder and president of Crozier Fine Arts, along with dozens of smaller, regional facilities in various countries. [ . . . ]
Sigrid Thorne, chief executive of Fortress Corporation, which has fine art warehouses in New York, Boston and Miami, said private collectors are the fastest growing segment of her business.
“Values in the modern art market have gone up 20 per cent a year for the last six years,” she said, though that growth may lag behind this year. “That’s very attractive. And the pieces are so large, most people cannot install them in their homes. They have to put them in storage.” Once there, the works are often shipped in and out by serious collectors to museums and galleries for shows.
“People loan their art work out for various museum shows throughout the world, so maybe it comes out of their storage for a while, and then maybe it goes into their homes,” said Andrea Hazen, an art adviser with Hazen Partners Art Advisory. [ . . . ]
“One of the ways this business has really changed is that it’s really no longer about storage,” he said. “It’s about private banking. We know who’s shipping what, who’s buying what, and we become sort of the keepers of secrets.”
With the number of loans from Transcon’s private collections soaring, what was once “slam it into a case and send it” is no longer, Mr Blodget said. Countless condition reports are done at all stages of the shipment for insurance purposes.
John Mullane, president of Transcon, said insurance companies have shown growing interest in fine art storage facilities as the values in the fine art world increase exponentially. “We had a collector who bought a piece about two years ago for about $600,000, and [five or six] months ago, it was sold for $12m,” he said. While appreciation rates of 1,900 per cent over a short period may no longer be seen in the market, insurers are nonetheless paying attention.