Joanna Ostrem, Head of Estates, Appraisals, and Valuations at Christie's, joins Cheddar Reveals to discuss what to look for when evaluating a piece, building a collection, and the growing interest from millennial investors.

Cheddar Reveals

A Guide to the World of Art Investment

Welcome back to cheddar reveals, brought to you by curiosity stream forget real estate. A rising number of millennials are turning to art flipping to build wealth according to a U. S. Trust study. Millennials are the fast growing segment of art collectors with their ownership rising over 8% since 2017. Of course not all investors are in it strictly for the money. Art after all is meant to be enjoyed. And joining us now is Joanna Ostrom, head of the state's appraisals and valuations at Christie's Joanna. Good to see you. Let's start by focusing in on millennials when it comes to art investing. Why do you think there is such a growing interest in this specific age group? Yeah, thank you so much for having me. And um I'm delighted to talk about this because as at Christie's were a 250 year old auction house and we're always looking for ways to engage and innovate and make sure that we're really reaching the next the next generation of collectors. So it's wonderful to see millennials join in and engage in some exciting new ways. And I have a lot to say about this because you know, there are a few factors that have really helped drive millennial art collecting and Covid actually played a big part during the pandemic. There was a strong increase in online transacting and our clients, like many of us were spending time at home, looking for ways to improve their living space where they were buying new homes that needed art and furnishings And it was really easy and comfortable for them to bid online. 32% of our new buyers were in fact millennials. But the challenges of Covid also led us and other art businesses to speed up our digital innovation, including virtual viewing rooms, as well as offering more online sales across categories. And both of these things, the digital innovations and the online sales platforms have really brought in many younger buyers who found this format less intimidating than traditional in person auctions. We've also innovated and brought the auction to our audience with more exciting and engaging productions of our marquee sales. In November of 2021, we had over 1.2 million viewers. three more evening sail across nine different platforms. So contrary to popular belief, art auctions are actually accessible to everyone and you can tune in for our next major sales in May, but beyond Covid, there have been some other factors and trends at play. There is a significant amount of diversity represented in the art market today, which resonates with younger buyers. For example, in Christie's Postwar to present auction last week, 12 New Artist Records were established. 10 of these were for female artists and the other two were for black artists. So really we're seeing our, our clients, especially millennials, really interested in a plurality of voices. Um, they're really looking for a dialogue of inclusivity and community that's really appealing and bringing in some new participation. Speaking of community. Yeah, yeah, all really interesting Joanna. I wonder if you have advice that you can share for new investors in this space who maybe don't have as much experience in the art collecting world, what should they be looking for? Yeah. You know there's there's a lot of advice to share and this is a question that comes up a lot because as as we see the frothiness of the market, people really are interested and excited to get involved. Um and I think really the most important aspect to share with potential collectors is education. So it's important to educate yourself about about both art and the art market. So it's as simple as looking at as much art as possible, learn what you like and what you don't like. Go to museums, go to art fairs and auction houses and I'm a bit biased um working at an auction house, but I really do think it's a great starting point um at Christie's we have museum quality exhibitions that change every week or two. Um and something that is a little known fact is that we're open to the public. All are welcome. We're located at rock center here in new york city. Please come and visit us. Um and I think the other great thing is that, you know, we are also, we also give free advice so that's something that's unique to the art world. You can get advice from our specialists from galleries from museums and other collectors. People are always willing to share their wisdom. Yeah. You mentioned the art market and kind of doing your research beforehand to understand. So wondering what the current state of that market looks like, especially over the past couple of years, during this pandemic. And why do you think right now is a good time to invest? Yeah, it's a great question. The art market is incredibly hot right now. It has been really, we've seen tremendous growth over the past year and a half or so. There's a lot of global demand um across all geographic regions. Um Christy's last year sold over $7.1 billion $1.7 billion dollars in private sales. Um But I think what is interesting is that as the market expands there's more in the market and there's the opportunity to look at previously overlooked artists. Um earlier you were showing some images of a really exciting sale that we're going to be offering in May. It's called the surrealist world of Rosalind Kirsten Jacobs and Melvin Jacobs. And this was a collection that was forged by two american retail executives through personal collections, personal connections with the artists. Um You know, it's a really tremendous collection that spans different categories and different price points. So you can see you have paintings, prints drawings, artists, jewelry, there's really something for everyone and I think this is something that will certainly appeal to two younger millennial collectors. And one thing that I want to flag about this collection is that um you know, there are some really wonderful women artists represented in the Jacobs collection including Dorothea tanning artist named Mina Loy as well as this wonderful jewelry designer named Noma Copley who was an artist who introduced the Jacobs too many of these fantastic artist friends like Margaret and Man Ray and Duchamp. These women, they've maybe been overshadowed by their male counterparts and now is a is a moment for them to shine on the world stage. Something that struck me about what you said is price point because we know our investments historically can be incredibly expensive. So do you think this blocks people from allowing new collectors to enter the market? And do you think art has to be expensive in order for it to actually be a good investment? I'm so glad you asked. I think there are a lot of different ways to find affordable art um whether it's at galleries, at auction houses or on the new online platforms, many of which have popped up in recent years. I mentioned Christie's online sales for a few moments ago and these are generally lower price sales that can serve as a great entry point for collectors and help demonstrate that the auction world is accessible. Um You know I think another thing to think about is going back to the Jacobs collection. Um This was a collection that was oftentimes gifts or or or small prices paid for these for these works of art at the time. And now the highest the price of the highest valued work of art in the collection is a photograph by Man Ray called the violent dangle. And this is an iconic work. Many of you will recognize this photograph. This is expected to sell for over 5 to $7 million which is its current estimate which will make a world record price for the artist. So I just bring this up because at the time Rosalind Jacobs when she acquired this from the artist, it was really about her relationship with the artist and the aesthetic value of the piece. And she was not thinking about how much it would appreciate in value to you know to the family's great fortune. Of course it's it's going to it's going to make a world record and we're delighted. But I think the important thing to remember when building a collection is that you can start at really accessible price points and just buy the things that love and means something to you that's more important than the monetary invest. Absolutely. You also mentioned a little bit earlier the digital transformation and some of the ways that Christie's has had to pivot during this time. How have you been influenced you think by the rise of N. F. T. S. We have absolutely been influenced by the rise of N. F. T. S. It was just over a year ago that Christie sold the first major N. F. T. At an auction house, which was people's every day's that sold for almost $70 million. Um Since then we've sold 100 more N. F. T. S. For nearly 100 and $50 million. So needless to say N. F. T. S are here to stay. The great thing about N. F. T. S is that has brought in a whole new category of buyers for us, 75% of the buyers in this category are new to Christie's with an average age of 42. And the wonderful thing is that some of these crypto buyers, they have been crossovers into um the more traditional tangible art. For instance, Justin's son who was an under bidder on the people lot ended up buying a Picasso and Warhol in a live auction a few weeks later. But one thing I wanted to mention about N. F. T. S, a really interesting NFC success story is a lot that was sold in our London evening sale of 22 weeks ago By an artist world of women, which is a group of bringing inclusivity and diversity to the digital art space. This lovely work surpassed its high estimate £500,000 space. I love that. It's definitely something that's needed, not only in the N. F. T. Space but art at large. So I'm also wondering another question for you, what do new collectors need to know about managing a collection once they have it and also ensuring that the value or the investment is actually preserved? Yeah. I think that that question really speaks to a critical aspect of collecting which is the importance of stewardship. Um collectors really need to understand the value of the collection that it goes hand in hand with properly caring for the works. So it's more than the process of buying and selling. You're really giving life to an object or group of objects, creating a home for these objects and caring for them until ultimately they're likely passed on to the next owner. So some tips I always share is that you want to make sure items are properly stored in terms of temperature and light exposure. You also want to make sure you're receiving updated appraisals to understand how values on the objects in your collections may shift. You want to make sure you keep your records and make sure you know the provenance of the work. And this way through all of these steps you can really ensure that you're preserving and enhancing the value over time. And another. I'll leave with a note about another note about roles and Jacobs who is an excellent steward of her collection. She worked with collection managers and maintained a really incredible archive of letters, photographs and other elements that tell the story of these collectors. Um And all of the works are in excellent condition. With the exception of 11 sculpture by Marcel Duchamp, that is in the form of the reverse form of female buttocks. So that gets gets your attention. Um And she this this object was sitting was sitting in her apartment during one of her many dinner parties and one guest mistook it for an ashtray. And you can see the cigarette butts. Yes. And so understandably, she was horrified. And she and her husband, they called, they called Marcel Duchamp who was a friend. They called him the next day and share the news with him and he laughed and he said, you know in my opinion, this has improved the work and added an inscription to it the next time he saw them. So there's an example of how even great stewardship sometimes things happen and in this case that's actually enhanced the value of the work. And really tells more of of this incredible story between these collectors and the artist friends. They have Joanna Ostrom, head of the state's appraisals and valuations at Christie's. So much good information there. Thanks for joining us