Tag: Art Basel 2022

 
It hasn’t even been a month since the shocking collapse of FTX rocked an already struggling crypto market and here we are at Art Basel Miami Beach 2022. At Miami’s 2021 art fair, the crypto-bros used their newfound wealth and dreamy-eyed insights for the future to turn up the party wattage to the highest decibel in Miami, an already debaucherous party city on the most excessive week of all of the weeks.

“Out of the blue, all these kids from crypto started coming down and spending a lot of money,” Andrea Vimercati, director of food and beverage at Moxy Hotel group and former director of Groot Hospitality, told the Financial Times. Groot Hospitality operates Liv, Story, and Swan, three major Miami hotspots. “Like, an insane amount of money.”

There were no limits to the excess with cases of the most expensive champagne being delivered to nightclub tables reserved for $50,000 per night. It was so excessive, entire condo developments were sold out with crypto. People were flashing their crypto wallets, as though it was any less cringe-worthy than showing off your bank account.

They’re now gone. With Bitcoin hanging around $57,000 in late 2021, the money was there to throw around and play with. As we inched closer to the unrestricted party that is Art Basel 2022, Bitcoin had sunk to around $17,000. And then, to add insult to injury, FTX suddenly imploded just two weeks before the annual art fair. Yikes.

Everyone involved asked similar questions. What does this mean for crypto? What does this mean for Art Basel sales? What does this mean for the service and hospitality industry that rolls out the unrivaled excess? And of course, what happens to the real estate boom that crypto helped to usher into our vibrant and cultural city?

What is happening to the nightlife and service industry?

Miami’s vibrant nightlife scene is certainly taking a hit in 2022 thanks to the crypto-crash.

“They were ordering 12 or 24 bottles of the most expensive champagne and just showering themselves without even drinking,” Andrea Vimercati, the director of food and beverage at Moxy Hotel group, told the Financial Times. “[The crypto entrepreneurs] wanted to show that they didn’t have any limits.”

Of course it is still Art Basel so the table spends are still astronomical, just dialed down a bit from 2021. It could be that the young, nouveau riche entrepreneurs have matured, or perhaps they are spooked by the FTX collapse and rocky year for crypto. Whatever it is, the crypto wallets are closed.

What is happening with art sales at Art Basel 2022?

While the sponsored yacht parties, NFT stunts, Web3 conferences and metaverse ragers are not as unlimited as they were in 2021, the art sales themselves seem to be back into the forefront of the fair, giving many involved a sign of relief.

“It’s the post-FTX world,” says New York dealer David Lewis in his booth on the fair’s opening day, referring to the collapse of the crypto exchange founded by Sam Bankman-Fried. “The art world has always been really wary of the crypto world,” a wariness, he says, that appears to have been justified. “I think there’s a lot of comfort in the fact that a lot of the ways of doing things that have been going on for years or decades—or if you think of painting, centuries—are back in the lead.”

As tensions mounted, the doors to Art Basel Miami Beach opened to VIP collectors on Tuesday and Wednesday, gallerists were relieved to find sales opening at a steady clip. Collectors from South America, Europe and New York browsed collections with heavy textures and layers, and more traditional forms than the digital pieces that have been more popular in recent years. Pharrell Williams, an Art Basel staple, had his eye on a $100,000 piece made of clay.

In addition to the more tangible pieces, works from iconic artists such as Andy Warhol have also flown from galleries. Floyd Mayweather picked up a total of 10-12 pieces during the VIP portion of Basel. Four of these pieces were by Andy Warhol, and he also grabbed a statue of a fist of burning money. Because he can. The total of his sales climbed north of $3 million before the doors were even open to the public.

“We pre-sold a lot, so the first hour or two is people seeing the pieces,” says Malik Al-Mahrouky, a sales director at Kurimanzutto, a gallery with locations in New York and Mexico City. Its pre-sales included, he says, a painting by Gabriel Orozco priced around $500,000 and two paintings by Roberto Gil de Montes, which sold for roughly $85,000 and $35,000. While English was far and away the dominant language heard in the fair’s aisles, Al-Mahrouky says he is surprised by the number of serious foreign collectors. “There are lots of Europeans this time around,” he says. “Last year there weren’t nearly as many.”

What this tells us with regard to the real estate market…

Using clues we have pulled from the crypto market, hospitality spending, art sales and the overall economy trends, it seems there will certainly be a shift to the Miami real estate market, but that is not necessarily bad news. What I believe we will experience is a  leveling out. Transactions will continue to happen, particularly in the luxury sector. Traditional buyers will be able to compete for properties vs the crypto buyers. The properties that sell will be less flashy and trendy, making way for a more refined space.

Miami is and will always be a desirable location for vacation buyers due to the factors we enjoy even after Art Basel has packed up and headed out. There is amazing culture, a rich culinary scene, never-ending entertainment and nightlife options, and plenty of career opportunities paired with a lack of state income taxes makes us the perfect combination for almost any resident. There really is something for everyone in Miami, and we are excited to cover each highlight in its own blog post.

As we move forward through the rate hikes, inflation and crypto collapse that we experienced in 2022, we expect the market to slow, but only to a more healthy level. Sellers should feel confident that their listings will not languish on the market and buyers should feel confident with their ability to compete for the home or investment they really love.

If you are interested in speaking more specifically about a neighborhood, project or listing, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.