Expectations were low ahead of the bellwether May auctions that took place this week in New York. The overall anticipated sales amounts were down significantly from the year before (and a small fraction of the year before that). In addition to there being no major collections on the block, days before the auctions began, Christie’s was hit by a cyberattack that resulted in its website going offline, leading people to question whether the sales themselves would happen at all.
“Everyone is eager to write the story that the market is down and subdued,” says Charles Stewart, the chief executive of Sotheby’s. “And obviously there’s a lot of uncertainty in the world, and the market is more selective, but I think this week is a huge validation for the overall health and strength of the art market.”
Before the sales began, Sotheby’s estimated that it would sell between $549 million and $784 million; its total of $633.4 million landed safely within estimates. (Estimates don’t include auction house fees which can range from roughly 14% to about 26%, known as premiums, although totals do.)
Christie’s also appeared on track to land within its presale estimates of $578 million to $846 million: As of Friday morning, its running total came to $527.9 million, and its remaining day sales were expected to add more than $100 million to its final numbers. Phillips missed the mark (albeit barely), selling $110 million worth of art after estimating that its totals would fall between $113 million and $163.5 million.
“I’m not going to say there’s no room for improvement, but we came out of this very happy,” says Jean-Paul Engelen, the president of the Americas and worldwide co-head of modern & contemporary art at Phillips.
In total, the three auction houses sold a collective $1.3 billion (and counting) worth of art.
Crumbling market peak
The very peak of the market — works priced over $20 million or so — seemed to suffer the most. During the May auctions last year, five artworks sold above $40 million. This year, there was only one–a painting by Jean-Michel Basquiat that sold at Phillips on Tuesday night for $46.5 million, eking past its low estimate of $40 million and nowhere near its high estimate of $60 million.
“We weren’t the highest painting of the week with $85 million,” Engelen says, referring to years past, “but suddenly we are with $46 million? That’s the surprising thing.”
Many other ultra-high end works fared similarly — or worse.
A painting by Richard Diebenkorn estimated between $18 million and $25 million failed to find a buyer at Sotheby’s. And at Christie’s, a painting by Brice Marden, which was set to be one of the sale’s most expensive — the estimate was $30 million to $50 million — was withdrawn at the last minute in response to what the auction house indicated was a lack of demand.
“There were some withdrawals,” said Christie’s CEO Guillaume Cerutti, speaking at a press conference after the auction on Tuesday night. “But they were for business, none of them was linked to the [cyberattack] incident.”
The top 10 lots reinforce perceptions of a diminished market. This year, they amounted to around $312 million, about a 22% drop from last year’s total of $403 million. Both pale in comparison to May 2022’s top 10’s $760 million.
Stewart, though, pushes back on the notion that the peak of the market has crumbled. “I honestly think that the things that come at those super-high levels aren’t so driven by people picking a market spot as it is other factors,” he says. “These tend to be driven by collections needing to be sold for whatever reason — it might be an estate situation, it might be whatever family dynamic is leading them to consider to sell an absolute masterpiece.”
But, he continues, “I don’t think there are five pieces that were ready to come, where people were saying, ‘It’s not quite the market moment.’ ”
Engelen has a slightly different takeaway. “If you talk about the general market, if sellers are realistic, there are absolutely buyers out there,” he says. “If they are greedy, then there are no sales.”
The top 10 works of the week are below.
$22.6 million for Joan Mitchell’s Noon from circa 1969
Sold at Sotheby’s
$23 million for Lucio Fontana’s Concetto Spaziale, La Fine di Dio from 1964
Sold at Sotheby’s
$27.7 million for Francis Bacon’s Portrait of George Dyer Crouching from 1966
Sold at Sotheby’s
$28.5 million for Leonora Carrington’s Les Distractions de Dagobert from 1945
Sold at Sotheby’s
$28.6 million for David Hockney’s A Lawn Being Sprinkled from 1967
Sold at Christie’s
$32 million for Jean-Michel Basquiat’s The Italian Version of Popeye has no Pork in his Diet from 1982
Sold at Christie’s
$33.2 million for Vincent Van Gogh’s Coin de Jardin Avec Papillons from 1887
Sold at Christie’s
$34.8 million for Claude Monet’s Meules à Giverny from 1893
Sold at Sotheby’s
$35.5 million for Andy Warhol’s Flowers from 1964
Sold at Christie’s
$46.5 million for Jean-Michel Basquiat’s Untitled (ELMAR) from 1982
Sold at Phillips
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Mayor Eric Adams has made no secret of his affinity for New York City’s business community and his willingness to take private meetings with wealthy people. But a new report exposing how a group of billionaires pressed Adams to crack down on pro-Palestinian protesters at Columbia University showed an exceptionally direct level of influence on a highly fraught issue.
A Washington Post article published Thursday took readers inside a WhatsApp group chat, formed with the intention of shaping public opinion on the Gaza war in Israel’s favor. Its members included billionaire Len Blavatnik, real estate developer and department store founder Joseph Sitt, investor Daniel Loeb and Kind snack food founder Daniel Lubetsky.
The story revealed that members of the chat held a Zoom call with Mayor Adams on April 26, days after he first deployed police to arrest protesters at Columbia. The members also described plans to hire private investigators to help the New York Police Department, and tried to organize campaign donations to Adams in hopes of rewarding him for suppressing what they viewed as antisemitic activities, the Post reported.
Some of those involved in the influence efforts have interests before the city that go beyond what was described in the article. Sitt, who reportedly suggested hiring the private investigators, is among the real estate developers angling for a lucrative casino license, pitching a Coney Island project that would require support from officials including Adams.
“As you saw he’s ok if we hire private investigators to then have his police force intel team work with them,” Sitt reportedly wrote in the chat on April 27, the day after their call with Adams.
Blavatnik, a Ukrainian-born business magnate, was among the people who donated the maximum $5,000 to Adams’ legal defense fund, created to defray the costs of the federal probe into his 2021 campaign. (Blavatnik gave another $2,100 to Adams’ campaign to support his “stand against antisemitism,” a spokeswoman told the Post, although the April donation has not yet appeared in campaign finance records.)
John Kaehny, executive director of the watchdog group Reinvent Albany, said the reported behavior is “par for the course” in a city where wealthy people have long enjoyed greater access to elected officials. More troubling, he said, is the fact that private citizens appeared to believe they could influence the actions of the NYPD.
“Deploying the city’s armed police to do this kind of intervention, that’s the biggest concern,” Kaehny said. “That’s a government action that is oriented towards the use of force, and it’s discretionary.”
The article makes no claim that the chat members had any direct effect on Adams’ deployment of the NYPD, which came only after Columbia administrators allowed police onto campus to arrest protesters on two occasions in April. The mayor’s office said private investigators never assisted the NYPD, and the mayor’s top spokesman accused the Post of trafficking in antisemitic stereotypes by describing a secret influence campaign.
“To be clear, both times the NYPD entered Columbia’s campus — on April 18th & April 30th — were in response to specific written requests from Columbia University to do so,” Fabien Levy, the deputy mayor for communications, wrote in a Friday morning post on the website X. “The suggestion that other considerations were involved in the decision-making process is completely false.”
But some who were already critical of Adams’ decision to authorize force against the protesters — and his coziness with the business world — pounced on the article.
“It couldn’t be more obvious that Mayor Adams is taking his cues from his billionaire donors,” said Jasmine Gripper and Ana María Archila, co-directors of the left-wing Working Families Party, in a statement Friday. “Mayor Adams continues to act in the interest of the ultra-rich, while ignoring the real and urgent needs of the working people who keep our city running.”
Adams, who once famously proclaimed “I am real estate,” regularly meets with — and receives campaign donations from — a wide range of business leaders. Crain’s reported in January that his personal calendar, obtained through a public records request, showed meetings with figures like Extell Development CEO Gary Barnett, Warner Bros. Discovery CEO David Zaslav and hedge fund magnate Bill Ackman — whom the Post also identified as a member of the WhatsApp chat.
Adams’ April 26 Zoom call with the pro-Israel businesspeople, reportedly held around 11 a.m., was never listed on the mayor’s public schedule that day. Kaehny, of Reinvent Albany, argued that the mayor should have disclosed the talks.
“This is the kind of thing that the mayor should talk about publicly — ‘By the way, I am getting asked by major figures, world billionaires, to do this kind of thing,’” Kaehny said. “This strikes to the heart of transparency and basic notions of democracy.”
A notorious New York City landlord offloaded one of his properties in Greenwich Village this week for nearly $20 million, according to a deed that appeared in the city register Thursday.
Landlord Fred Ohebshalom, the chief executive officer of Empire Management, sold 208-210 W. 10th St. for $19.1 million to a limited liability company linked to Aziz Kabbaj, a managing partner at Reshape, a New York-based firm that calls itself a "next-generation investor in technology-enabled companies that need real estate to scale," records show.
Ohebshalom has repeatedly made headlines in recent months for allegedly failing to safely maintain a number of his residential properties. He was sued by the city last year for allegedly allowing serious safety hazards to go unchecked at eight apartment buildings in Upper Manhattan, Crain's reported. At 515 Cathedral Parkway, for instance, where tenants have reportedly called him "heartless and inhumane," Ohebshalom is accused of racking up more than 50 violations from various city agencies, including for broken elevators and cracked facades.
As of last year, Empire had accumulated more than 300 violations for the disrepair, according to the city's suit at the time, which was filed in Manhattan Supreme Court in January 2023.
The West 10th Street building — a 6-story walk-up with 39 units — was not named in the lawsuit, and it's unclear how many open complaints it has on file. Ohebshalom sold the property, between West Fourth and Bleecker streets, under the limited liability company Quartz West 10, the address of which is the same as Empire Management, at 347 Fifth Ave. in Manhattan.
It's not clear why Ohebshalom is parting ways with the building, which, according to city records, has been under control of Empire since at least 1999.
An apparent family member with the same last name — Daniel Ohebshalom — is also known for problems at his buildings. Considered the city's "worst landlord," Daniel Ohebshalom turned himself into authorities in March and is currently behind bars on Rikers Island for allegedly harassing his rent-regulated tenants in order to force them out and for allegedly refusing to fix hundreds of violations at two of his Washington Heights properties.
"He forced his tenants to live in unthinkable conditions," Manhattan District Attorney Alvin Bragg said earlier this month when announcing the indictment.
The Ohebshaloms — who allegedly attempt to obfuscate their responsibilities by using various surnames and private entities in their real estate transactions — are well known among tenants and housing organizers, Hell Gate reported last year, and own at least 100 buildings across the five boroughs.
A message left for Fred Ohebshalom at his Empire Management office was not returned by press time, and when reached by cell phone, he declined to comment.
Signature Bank’s collapse delivered an aftershock yesterday, when a ratings agency alerted Wall Street to a jump in vacancies at the Sixth Avenue building where the bank occupied space.
The failure of Signature caused the vacancy rate at 1177 Sixth Ave. to jump by 10 percentage points last year, to 26%, Fitch Ratings said in a report Thursday. The availability rate on the avenue is 13%, according to Savills. Availability rates capture what’s empty now and what’s soon to be vacant.
The property is a 47-story, 1 million-square-foot tower at West 45th Street. It was developed in 1992 and acquired in 2007 by the California State Teachers Retirement System, Silverstein Properties and UBS. In 2021 CALSTRS and Silverstein bought out UBS’s share at an $860 million valuation. Kramer Levin is 1177 Sixth’s anchor tenant, taking 270,000 square feet across floors 22 to 30, according to DBRS Morningstar.
The buildings at 1177 Sixth and 450 10th Ave. both took direct hits in last year’s banking turmoil. Owned by Mark Karasick’s 601W, 450 10th leased 200,000 square feet to First Republic Bank.
After Signature went bust, its new owner, New York Community Bancorp, kept office space at 1400 Broadway owned by the Malkin family. But at 1177 Sixth about 90,000 square feet of Signature’s space was vacated, Fitch said, adding that the building’s cash flow has declined by 5% since UBS was bought out.
Over the next three years the reddish-pink granite building faces the loss of tenants renting 16% of the space, Fitch said, including law firm Faegre Drinker Riddle & Reath and Tradeweb Markets. Fitch lowered its outlook for 1177’s $450 million mortgage to “negative” while maintaining investment-grade ratings for all its various slices. Fitch said property performance “remains in line” with expectations.
CALSTRS, which owns 97% of 1177 and manages $330 billion in assets, declined to comment.
Silverstein reports two new tenants have taken about half the space left behind by Signature.
Private equity firm Mill Point Capital Partners, which occupies the 44th floor, signed a six-year extension and expanded its footprint to 24,000 square feet. The YMCA Retirement Fund leased a similar amount on the 16th floor after leaving 120 Broadway.
Dara McQuillan, chief marketing and communications officer at Silverstein, said that “1177 is a well-amenitized office building in a dynamic neighborhood, and we believe the property will continue to attract a diverse range of tenants looking for modern, comfortable offices with easy access to transit and many of New York’s best restaurants, sights, and cultural destinations.”
On March 27, 2023, Crain’s New York Business reported that “New York holds onto its spot as the world's financial capital” based upon the thirty-third edition of the Global Financial Centres Index (GFCI 33). The GFCI provides evaluations of future competitiveness and rankings for 120 financial centers around the world. According to the GFCI 33, New York leads the index, with London second, Singapore third, and Hong Kong fourth. Similarly, the GFCI 33 indicated that Chicago and Boston joined New York, San Francisco, and Los Angeles in the world’s top 10. New York also retained its leading position in the Fintech ranking, followed by San Francisco, London, and Shenzhen with Los Angeles, Boston, Chicago, Shanghai, Singapore, and Washington rounding out the top 10 for FinTech.
A lot has changed since March 2023. Since that time New York’s position as the world’s financial capital has been threatened by many of the countries and states identified in the GFCI 33. Among the most important changes is that those countries and U.S. states have adopted new laws designed to promote technology in commerce and finance. In the US, for instance, in July 2022, the Uniform Law Commission (ULC) and the American Law Institute (ALI) promulgated the Emerging Technologies amendments (Model UCC Amendments) to the Uniform Commercial Code (UCC). As of today, close to two dozen states and the District of Columbia have adopted the Model UCC Amendments, with bills to enact the Model UCC Amendments pending in other states.
However, New York is not one of those states. The New York UCC has not been updated since 2014. New York now finds itself, with other jurisdictions adopted in the Model UCC Amendments, in a difficult position. New York law is becoming increasingly outdated and ill-suited to many modern financial transactions.
To retain its preeminent position, New York must act quickly to adopt the New York Emerging Technologies UCC Amendments proposed by New York Senator Brad Hoylman-Sigal in the New York Senate (S.7244-A) before the legislative session ends in June. The New York Emerging Technologies UCC Amendments are a tailored version of the Model UCC Amendments designed specifically to mesh with New York’s electronic transactions law and New York policies in favor of the free negotiability of certain payment rights.
New York commercial and financial law has long been favored by those conducting business transactions and their lawyers because of New York’s robust respect for freedom of contract and strong protections for the negotiability of commercial instruments. This has made New York the preferred U.S. jurisdiction for paper-based commercial, financial and other business transactions. Unfortunately, the same is not yet true for transactions involving digital assets such as electronic payment rights, tokenized assets, and non-fungible tokens.
Enactment of the New York Emerging Technologies UCC Amendments during the current legislative session will promote and encourage technological and commercial advances that decrease transactional costs and enhance the efficiency, certainty and security of commercial and financial transactions governed by the New York UCC. The importance of these improvements to the New York UCC cannot be overstated. Technological and commercial advances that decrease transactional costs and enhance the efficiency, certainty and security of commercial and financial transactions are major factors that are considered when market participants decide whether to choose New York as the governing law and the jurisdiction to resolve disputes and whether businesses will decide to locate to New York.
Enactment of the New York Emerging Technologies UCC Amendments during the current legislative session will also help ensure New York’s leadership in commercial and financial progress and growth and will disincentivize migration of digital commerce to other jurisdictions that more clearly promote and encourage technological and commercial advances. Every time another state adopts the Model UCC Amendments, the more likely New York risks that market participants will prefer one of those states for transactions involving digital assets. Once that business is lost to other states, it will become increasingly difficult to get it back.
Enactment of the New York Emerging Technologies UCC Amendments during this legislative session will also help persuade multinational and international market participants to choose New York law over the law of other countries, such as England, which are rapidly reforming their commercial laws to accommodate emerging technologies and electronic transactions. New York must act expeditiously to preserve and strengthen its attractiveness to multinational and international businesses.
Lorraine McGowen is Co-Chair of the New York City Bar Association’s Digital Technology Task Force.
Leases
Physical therapy practice signs lease for Midtown tower
Address: 515 Madison Ave., Manhattan
Landlord: GFP Real Estate
Tenant: Touch of Life Physical Therapy
Lease size: 3,500 square feet
Lease length: 10 years
Asset type: Office
Brokers: Martin McGrath represented the landlord in-house along with Newmark’s William Grover. CBRE’s Paul Walker represented the tenant.
Internist and TV commentator takes office space in Plaza District
Address: 515 Madison Ave., Manhattan
Landlord: GFP Real Estate
Tenant: Dr. Michael Aziz
Lease size: 2,000 square feet
Lease length: 10 years
Asset type: Office
Brokers: Martin McGrath represented the landlord in-house along with Newmark’s William Grover. Douglas Elliman’s Corey Shuster represented the tenant.
Sales
Closed food court site in Elmhurst finds a taker
Address: 45-01 82nd St., Queens
Seller: James Kwang Lee
Buyer: Xiao Chu Zhou
Sale price: $14 million
Asset type: Retail
Cast-iron rental building in Tribeca changes hands
Address: 41 White St., Manhattan
Seller: Benchmark Real Estate Group
Buyer: Onur Tatar
Sale price: $14 million
Asset type: Mixed use