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Over the weekend, the New York Times took yet another stab at a familiar trend story about the art market: the supposed impact of art fairs on the small gallery model.
Unfortunately, the grab bag of anecdotes doesn’t really add up to the story’s thesis. Take the example of the collaboration between Venus Over Los Angeles and another, smaller gallery:
Adam Lindemann has turned over the programming of his Los Angeles space, Venus Over Los Angeles, to the Lower East Side gallery Ramiken Crucible, run by Blaize Lehane and Mike Egan. “The smaller galleries, they want to keep their artists,” Mr. Lindemann said. “This is a way for them to keep their artists and not have everyone they represent get stolen from them.”
Rather than an issue related to art fairs, this slightly unorthodox approach is more of a real estate story. Lindemann is developing a building in Los Angeles with a gallery as its anchor, his gallery. Outsourcing the gallery’s management to Ramiken Crucible lowers Lindemann’s operating costs while adding to the value of his real estate project.
Real estate is the unacknowledged legislator in the art market. Art fairs may be an efficient, if expensive, way to acquire new customers. But art dealers face a more immediate problem, the decline of retail as a cultural experience or form of discovery.
Art dealers used to rely upon walk-in crowds and street-level exhibitions to promote their artists and the artists’ new work. But street-level retail is undergoing a fundamental change as illustrated by The Real Deal’s recent analysis of the evaporation of Soho retail not long after a real estate buying spree took place:
In total, investors bought 40 properties in the neighborhood that as of last month had more than 163,000 square feet of retail space sitting vacant, representing nearly one-third of all the vacant space in the district. As the retail market struggles citywide, landlords are under pressure to occupy the space, regardless if they’re able to achieve the rent they anticipated when they closed the sale. Soho saw average asking rents double from 2008 to 2014, hitting $890 per square foot that year, figures from the Real Estate Board of New York show. While those numbers have declined, reaching $812 in May, many tenants still aren’t signing up. If they are, it’s for short-term deals as they struggle with an unpredictable economy and the rise of online retail.
In other words, Soho has seen a rapid rise in rents along with an influx of investment and a decline in occupancy. Soho may be an extreme example, and there aren’t any galleries in Soho anymore, but the story in Chelsea is somewhat similar. There residential real estate development is more valuable than renting street-level space to galleries.
Looked at through the lens of real estate pressures, the Times’s story makes a lot more sense. Are art fairs a factor? Sure. But they’ve been a part of the art market equation for so long now that it is hard to say the art fairs are the issue.
None of this is to suggest that there’s an easy solution for small galleries in today’s global art market. It is clear, though, that street level retail in a gallery neighborhood is no longer the strategy for discovery in the art world today.