HEATHER SACRE and JAMES CARONA FOUNDERS Heather James Fine Art has been in business for 25 years with galleries located in Palm Desert, Jackson Hole, and Montecito, as well as consultancies in Los Angeles, New York, San Francisco, Newport Beach, Austin, New Orleans, and Basel. As we have dealt with important artworks spanning a wide cross-section of genres and time periods, we have been fortunate to place works with some of the world’s top collectors. Always aiming to be a resource in art decisions for our clients, we have created this guide to the investment potential of art as an asset. Some of our clients have asked why they should consider buying art in an uncertain economy. We do understand the instinct to wait for markets to stabilize before making any large purchases; however, many seasoned collectors are actively looking for opportunities now more than ever. In fact, it is precisely during times of financial uncertainty when many choose to invest in tangible assets such as art. Investors are seeing that art is one of the few assets where they can currently get yield, as other assets like commercial and residential real estate are less reliable because of COVID-19 disruptions. Our experience has been that during financial crises, such as in 2001 and in 2008, there is a flight to blue-chip tangible assets. Historically, blue-chip artwork has performed at a commensurate rate versus the S&P 500, as the graphs in the following pages demonstrate. Warren Buffet has famously said to “be greedy when others are fearful,” suggesting that times of turmoil can present great opportunities to buy. With this catalog, we hope to demystify the art market a bit and to offer some examples and data on art as an investment. It would be our pleasure to assist you in your personal art endeavors by connecting you with one of our Fine Art Consultants. Please do not hesitate to reach out.
BlackRock CEO Larry Fink:
“The two greatest stores of wealth internationally today include Contemporary Art…and I don’t mean that as a joke, I mean that as a serious asset class, and the other store of wealth today is apartments in Manhattan, Vancouver and London.” Business Insider, 2015
Heather James Fine Art - Palm Desert Picasso exhibition, November 2009
ART MARKET 2020 The art market is very large in its scope, and it is a significant repository of wealth Every year, there is a 400-page Art Market Report put out by UBS Global art market sales in 2019 reached $64.1 billion, down 5% year-on-year by volume The US was the largest market worldwide and accounted for 44% of global sales by value. The market remained at its second highest level in history After two years of resilient growth given the country’s turmoil with the rollout of Brexit, the UK market declined by 9% in 2019 to $12.7 billion, accounting for 20% of the global market by value France was the one major market to buck the declining trend, with sales advancing 7% in value to $4.2 billion, and increasing its global share from 6% to 7%
Heather James Fine Art - Jackson Hole Andy Warhol exhibition, July 2019
Monet – Meules sold for $110M at Sotheby’s in May 2019. This is the new world record for any Monet sold at auction and will certainly set a new precedent for high-quality and iconic images by Monet. This is a stunning example of an artist whose market has consistently performed incredibly well over time. The Monet art market trajectory has strengthened over time, culminating at this extremely high price point. In fact, Monet is ranked the #2 artist for art sales by volume at auction in 2019. Picasso currently surpasses Monet as the #1 artist for art sales by volume.
Image from Sotheby’s Monet auction , May 2019
Mimetic Gestures by Njideka Crosby sold at auction on in May 2018 for $1,932,500. Heather James Fine Art curated Njideka Crosby’s first show in 2011. Our gallery curator, Chip Tom, championed Crosby early in her career because he recognized her extraordinary talent. We sold this exact piece to our client in 2011 for under $10K.
Heather James Fine Art - Palm Desert Uncommon Commencement exhibition, July 2010
The S&P 500 Dividends Reinvested Price Calculator Since 1976 April 1976 - April 2020 Annualized S&P 500 Return - 7.812%
S&P U.S. Aggregate Bond Index - S&P Dow Jones Indices Compound Annual Growth Rate 2010 - 2020
3.74%
U.S. HOUSING MARKET The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index Compound Annual Growth Rate Jan 2010 - Feb 2020
2.5%
GOLD INDEX April 2010 - April 2020 Annualized Gold Return - 3.97%
Start Price- $1,161.40
End Price- $1,714.10
ART 100 INDEX AMR is the Art Market Research index that tracks price movements across the international art market. For this All Art Index, AMR selects the top 100 ranking artists, whose paintings have been sold at auction, around the world. The Art 100 Index captures a significant share of the art auction market by value. The compound annual growth rate for the Art 100 Index, over the years from 1976 to 2020, is 5.8%.
RANKING OF ALL INDICES 01
S&P 500 Dividends Reinvested since 1976 - 7.812%
02 03 04 05
Art 100 Index - 5.8% Gold Index - 3.97%
S&P U.S. Aggregate Bond Index - 3.74%
S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index - 2.5%
TOP TEN ARTISTS
Art Market Research takes the number of lots sold by each artist to calculate a ranking list. This shows the total amount of artists’ sales over one year by volume. The first 10 artists ranked, by sales volume, are shown here: Picasso, Monet, Zao Wou-Ki, Warhol, Zhang Daqian, Wu Guanzhong, Richter, Hockney, Qi Baishi, and Basquiat. In our estimation, there is a major shift happening in the art market right now that is not reflected in the Top 10: works by important women artists and artists of color are starting to gain momentum in the art market. In fact, the market for female artists has been largely undervalued in comparison to their male counterparts. Nearly all of the top museums with whom we work, and many top collectors, are actively seeking important works by top female artists and artists of color like Njideka Crosby, Helen Frankenthaler, Mark Bradford, Joan Mitchell, Elaine de Kooning, Sam Gilliam, Louise Bourgeois, Frida Kahlo, and others.
The graphs prepared by Art Market Research show the annual rates of return for a selection of genres: Old Masters, European Impressionists, Modern Art, and Contemporary Art. For each of these genres, look at what the trend appears to be over a long period of time.
OLD MASTERS
FRENCH IMPRESSIONISTS
MODERN ART
CONTEMPORARY ART
OLD MASTERS
FRENCH IMPRESSIONISTS
MODERN ART
CONTEMPORARY ART
PABLO PICASSO - The Gold Standard Ranked #1 in auction sales by volume in 2019 This data is tracking a Compound Annual Growth Rate for works by Picasso at 5.5
Pablo Picasso, Les Femmes d’Alger (Version “O”) Sold For: $179,365,000 on May 11th, 2015
CLAUDE MONET: A Prudent Investment Ranked #2 in auction sales by volume for 2019 Monet’s market is another excellent model of a successful market trajectory over time. Compound Annual Growth Rate: 9.1
Claude Monet, Le Chemin du Petit Ailly a Varengeville, 1882 Oil on canvas, 23 1/2 x 28 7/8 in.
Share of the global art market by country in 2019 Data was taken from the 2020 Art Market Report by UBS. UK and China switch places year to year, but, so far, the U.S. has remained steady at #1.
#1
#2
U.S.
CHINA
37%
29%
#3
#4
U.K.
FRANCE
18%
#5 SWITZERLAND
2%
#7
AUSTRIA
1%
7%
#6 GERMANY
2%
The U.S., China, and the U.K. maintained their dominant position in 2019 with a combined share of 84% of the market
Advantages of Art as an Asset Class Demand for Art The demand for works of art, particularly by blue-chip artists whose work is in limited supply, is growing worldwide.
Significant Appreciation As the art market graphs have shown, art can deliver significant appreciation over time.
Tangible Wealth Tangible investments like art, real estate, or gold can operate as a hedge against economic uncertainty.
Tax Incentives - Institution Donations There are tax incentives for donating art to institutions, including gifting to museums. Consult your CPA for the specific guidelines.
Impressionist and Modern art on exhibit at our Jackson Hole, Wyoming gallery
Visitors enjoying works by Alexander Calder at our Calder exhibition, November 2015
Intangible Advantages of Owning Fine Art STATUS Personality, Legacy, Social Currency
AESTHETIC Visual Pleasure, High Design, Emotional Response
ACADEMIC Intellectual Discovery, Historical Context
CLAUDE MONET
Monet has been a focus of ours for the past 18 years. Of the approximately 1,900 paintings by Monet in existence, there are currently about 800 paintings owned privately worldwide that could ever come up for sale. The balance will be held in perpetuity in museum collections. Over time, many of the 800 works held privately will inevitably make their way into museum collections, further limiting supply. Monet paintings offered at Christie’s and Sotheby’s under the $5 million price-range have been included in the more important evening sales, rather than the day sales. This is an indication of strong desire in the market. Works by Monet currently priced under $5 million dollars will have the greatest appreciation potential. Top-quality artworks by historic artists are a part of an overall asset allocation strategy. Finished works of high quality achieve the highest prices and will continue to appreciate over time. Monet’s most sought after and recognizable subjects are series paintings, cliff scenes, still lifes, waterscapes, and landscapes. One consistent thread evident in all of his best paintings is light. Paintings with beautifully rendered light will always be coveted.
Selection of Monet paintings sold by Heather James Fine Art
Le Repos dans le Jardin is the first Monet painting sold by Heather James. We purchased the painting approximately eighteen years ago from the Metropolitan Museum of Art in New York. It depicts Monet’s wife, Camille, outside their family home at Argenteuil.
Heather James has sold Pots de Tulipes three times over the past fifteen years. Monet said, “If it were not for flowers, I would never have become an artist.”
Les Rosiers is a classic Monet garden scene.
Fragment de Nympheas is one of Monet’s most famous water lily paintings. The scene is from his pond in Giverny.
La Seine depicts the Seine river outside of Paris and is dedicated to one of Monet’s most steadfast patrons. Monet would often paint the same scene at different times of day to capture variance in lighting and mood. Here, he has painted the Seine during stormy weather.
Investing In Art Has Associated Risks Importance of an advisory service to mitigate risks and navigate the particularities of the art market:
Provenance, Authenticity, Condition Selling Costs Price Transparency Market Inefficiencies Heather James can help you navigate these issues
SERVICES We provide a wide range of client-based services ACQUISITIONS
Interface with auction houses, dealers and private clients
Logistical coordination with auction houses, including packing, pick-up, transport, and installation Relationships with dealers and private clients for sourcing artwork Assessing artwork condition and quality for purchase consideration; assistance obtaining certificates of authentication from artist foundations or expert scholars
COLLECTIONS MANAGEMENT Collection documentation
Cataloguing your collection with detailed inventory documentation including photography, condition reports, and certificates of insurance organized and maintained in our digital records
Installation and security
Full-service installation for all art types and sizes Wall-to-wall art handling services: installation and de-installation; custom packing for transport or storage; specialized installation for earthquake mitigation and theft mitigation; consultation on security system Home curation: in-house installers and in-house curators to help place and design the collection; advising on lighting and custom display systems such as pedestals and vitrines Facilitation of conservation, restoration, and preservation
Strategic loans to museums globally
LOGISTICS MANAGEMENT Location tracking, packing, storing, delivery
Climatized storage and transportation: secure storage on-site or at external facilities; coordination with trusted partners and fine art shipping companies White glove handling to ensure the safety of the artwork at every step of transportation by air, ground, or sea, from crating and packing to unpacking and installation Personalized solutions for multimodal art shipping nationally and internationally
ADDITIONAL RESOURCES Framing
Re-framing, re-glazing, and advising on lighting and display
Conservation and restoration
Facilitating conservation and restoration treatments from beginning to end, through communication with conservators, treatment proposals, secure transport, and treatment documentation
Home staging
Consultation visits, artwork selection for key walls and spaces, and installation Exchange and installation of artwork that may sell while on display as all works provided for staging remain active gallery inventory Negotiations with home buyer who also seeks to purchase the artwork on display
In-house registrar department to oversee logistical planning, necessary paperwork, and documentation for museum loans
Art Advisory
APPRAISALS
FINANCIAL SERVICES
Updated appraisals and real-time market updates
Longstanding partnerships with appraisers for efficient and thorough documentation Access to market research tools for valuation, including market price index graphs and auction comparables Complete documentation of artwork information, including provenance, exhibition history, and literature references
Insurance advisory
Certificates of insurance and appraisals for insurance purposes
Lending for purchases and liquidity Assisting with loans for acquisition or against existing owned art
ESTATE AND TAX PLANNING Art trusts
Full documentation of the artwork or collection with digital records, photography, and condition reports for Fair Market Value estate planning Facilitation of appraisals for insurance purposes and estate tax filing
Museum gifting
Interfacing with museums to facilitate donations, including assistance navigating the necessary tax documents and legal forms Obtaining appraisal documents for donation purposes
OUR GALLERIES
CONSULTANCIES LOS ANGELES
NEW ORLEANS
NEW YORK
BAS
SEL
SAN FRANCISCO
NEWPORT BEACH
AUSTIN
FINE ART CONSULTANTS
JAMES CARONA
MONTANA ALEXANDER
NIA AVERY
CATIE RINI PATTON
JULIA JACKSON
SUE KIM
CHIP TOM
MARY WOOD
TOM VENDITTI
Owner jim@heatherjames.com
Montecito catie@heatherjames.com
Los Angeles chip@heatherjames.com
Partner - New York montana@heatherjames.com
New York julia@heatherjames.com
Basel mwood@heatherjames.com
New Orleans nia@heatherjames.com
San Francisco sue@heatherjames.com
Montecito tom@heatherjames.com
EMMA BARNES
JESSICA GLASIER
BRECK KLING
ANDREA RICO-DAHLIN
Palm Desert emma@heatherjames.com
Jackson Hole breck@heatherjames.com
Newport Beach jessica@heatherjames.com
Jackson Hole andrea@heatherjames.com
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