|Editorial: Artleasing - Publication: Art Business News |
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Leasing fine art is an increasingly common revenue stream for fine art galleries of all industry sectors. For some niche galleries, the most lucrative marketplace is leasing artwork for movies, TV series and commercials, while another less glamorous, though equally profitable sector exists via the everyday marketplace of the corporate board room, offices and hotels.
Most leasing entities operate leasing programs based on a monthly rate. Leasing periods can generally be extended by agreement and the artwork can be purchased at the end of the period on beneficial terms. During the period of the lease, the lessee is responsible for the care and insurance of the work.
Catering for all things Hollywood and filmic from its Silverlake base in Los Angeles, Ghettogloss gallery leases work to all the major studios, including Fox, Dreamworks, Warner Brothers and Sony. Ghettogloss have been leasing art as a gallery for the past two years, with director Fiora Piper having leased her own paintings and drawings for the past ten years.
Asked how the leasing business compares to running a conventional gallery in terms of extra duties and investments, Piper says "we are a pretty conventional gallery in terms of showing once a month and representing fine art for sale. The rental part is just another division".
Piper says Ghettogloss has an open ended policy when it comes to rental deposits. "Insurance is required for rentals. Most of the decorators who rent from us have been contacts of mine for years. We get a weekly fee for rentals, and work with a multitude of different types of corporations. We also work with interior designers, not really architects."
Pattee Stayrook, Director of Art Leasing company, Artorama based in Venice Beach Los Angeles has been leasing art predominantly for film and television for the past 9.5 years. "I started representing artists and curating sets with artwork as a new approach for artists from all over the world to have exposure, money and a new realm of clientele based on the film and television industries.
"I also work with interior designers, corporate collectors and private clients. I am currently working with a more international clientele as an art consultant for large hotels, spa resorts and private estates."
"The artwork varies from project to project. Curating the sets for "Austin Powers, The Spy Who Shagged Me", we went from Austin's 60's pad to his 90's pad to Dr. Evil's Lair and more. The Art Department was looking for paintings, sculpture, photography and functional objects. It is my position to offer the clients various forms of artwork to create the vibe in each different set. Many times they are looking to "re-create" a famous artist's style for the set. I will offer them an artists work that is similar to that style or commission an artist to create a piece that will look like the original without copying it directly
For Artorama, Stayrook initially establishes a rental agreement between a production company and her company. "I represent the artists and am responsible for the legal contracts and clearances.The artwork is insured by the production company or the individual client while it is in their possession. There is a rental fee paid for each piece of artwork, the standard rental being on a weekly basis. If the production needs the artwork for an extended period, I will negotiate a fee that works for all parties.. I also require a certificate of Insurance in lieu of a deposit."
According to Polly Larson, Director of the Cultural Exchange Gallery in Scottsdale Arizona, which has operated a leasing program for the past 25 years, "The financial benefits of leasing can be lucrative if you own the artwork and do not have a lot of capital investment tied up in the venture."
The Cultural Exchange represent 18 contemporary artists from all over the United States. The gallery also takes artwork on consignment from private and corporate clients wanting to sell their art collections which include works from the early 1900's to contemporary art.
.Larson says The Cultural Exchange do not require a deposit for their leasing programs, fees are monthly assessments based on the retail value and vary depending upon which program is chosen, i.e. art rentals or lease to purchase programs. The gallery require that clients provide insurance either with their own company or by purchasing it from The Cultural Exchange..
"Offering a rental/leasing program is prohibitive for most galleries because you need to own the inventory, "Polly says " We have over 3000 works of art to choose from which is a great advantage over other galleries due to our extensive owned inventory.
"Another cost consideration is insurance which is greater since you have more of an inventory to insure.. We also operate a traditional gallery so we actually have three different sources for inventory thus giving us a competitive advantage on all aspects.
Larson says safe art is the best bet when it comes to the leasing market. "By that I mean, landscapes, abstract works, still lifes, any artwork that does not have a content that could be offensive, i.e., religious, sexual, etc.
"Our target market has been the local corporate market with a concentration of law firms, financial institutions and any company that needs to project an impressive corporate image. Our program has now expanded to include the residential market including private homes, and real estate agents," Larson says.."
Located in Sasakatchewan, Canada, "The FinerArts.com have been involved with art leasing since 2001. According to Darren Toombs, V.P. Technology with the firm, "Our target market is larger businesses and professionals like doctors, dentists, and optometrists. In recent months we have been speaking to interior design professionals and are on the cusp of some significant agreements."
Toombs says the only style that doesn't work is dark art. "Two styles are very popular here. Landscapes (northern lights, lightning, and Western art (cowboys and the range) pulls ahead marginally."
"Since the purpose of art lease in our eyes is to ensure that public spaces are kept artistically fresh, rotating art works are our specialty,"Toombs says. Pieces can be rotated on a previously agreed to periods (every 1,2,3 months, etc.) This time frame can be random at the clients request ".
Lisa Powell of Art Rent and Lease in Portland Oregon says her company was started in 2000 "to provide a unique rental program to the hospitality, corporate and healthcare markets."
"Our program is unusual in that we contract with artists, galleries and museums to provide fine art to our clients via a simple rental that is cancelable, provides for an upgrade/exchange of the piece(s) at any time, has no interest costs and is a true rental for tax purposes. Our specialty is working with consultants, decorators and designers to provide paintings, sculpture, tapestry, glass - virtually any fine art product that meets the clients requirements, typically within the $1,000 and $25,000 price point," Powell says.
"Because we're the rental agency, we inventory no fine art ourselves. Our clients choose pieces from our participating artists, galleries and museums who ship at the time of rental - this allows us to offer new pieces daily without investing in a large inventory base."
Bella-Bella Art Leasing of Ocean City Maryland has been in business since 2000. The company's major clients are now restaurant owners, property developers and event coordinators for venues such as hotels and, private homes.
According to owner, India Bandorick, "I started leasing when a friend asked me if I would "lend" him one of my pieces for his grand opening of his restaurant. That started my leasing program. He bought the painting after 2 months of leasing."
"Any art is available," says Bandorick. "I do insure my artwork and I have an extensive lease that covers all parties, the gallery owner, the artist and the person with the lease. The post popular leased item is the larger oil paintings or limited edition prints. I do offer a few sculptures but the majority would be the paintings. "
Bandorick says all the pieces she has on lease were purchased for the gallery. In terms of fee structure Bella Bella require a deposit for their pieces and there is a monthly fee. "I sometimes do a daily fee (usually for grand openings or parities)".
" I do have insurance for the pieces, though If the piece is damaged in any way (that my insurance won't cover (mostly by hurricanes or floods) the customer must pay in full-the retail cost of piece. It's just like leasing a car, if you wreck a car that you lease, you still have to pay for the car's damages etc."
W ebigo, a largely online art lease entity based in Sun Lakes, Arizona established their leasing program with the primary goal of providing a cash flow for its artists while exhibiting their work in very prime locations.
According to Lopaca Kimsey, Executive Director with the company, "Most of our lease arrangements are with corporate offices, banks, financial institutions, Insurance companies, hotels and a variety of very visible locations.
Each Webigo lease location has the option to sell the piece they are leasing and in return will receive a commission for doing so. The lease arrangements are on a monthly payment schedule with the normal lease term being one year.
"We have found that the businesses love the arrangement as they get the write-off while they also get to view new works on a monthly basis," Kimsey says.
"Exposing your artists in a corporate setting gives the work more prestige and a feeling of elegance not found in a gallery setting. Art work viewed in a corporate setting is more appealing and than art presented in a sales like atmosphere," Kimsey says
In terms of the film industry opening an additional revenue stream, Kimsey believes the corporate sector is still strongest. "The film industry was probably the first big corporate lessor of art but many big businesses are finding it very appealing financially. Corporate heads still do like to surround themselves with fine art as a measure of success without having to spend all the money up front".
Written by Craig Stephens
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