Ultra-Rich Shop in Secret Showrooms at Super Bowl of Art World

(Bloomberg) -- When thousands of wealthy collectors descend on Switzerland for Art Basel next week, works by some of the most coveted artists won’t be on public display. Instead, they’ll be offered to select clients, one by one, in private viewing rooms.

Some rooms are tucked away above the aisles of the convention center, where 290 galleries from 34 countries will set up booths at the world’s biggest modern and contemporary art fair. Others are sequestered at high-security warehouses in an industrial area 15 minutes away by car.

“I call it an off-the-floor trade,” said Larry Wasser, a Toronto collector and former wealth manager. “These transactions are happening every day during the fair. It’s all about putting buyers and sellers together during the Super Bowl week of the art business.”

Art Basel’s 50th edition will have an estimated 3.5 billion euros ($4 billion) of art on display, according to insurer AXA SA. While galleries ship scores of works, their carefully curated booths can accommodate only a fraction of the inventory. Private viewing rooms, which Art Basel rents to exhibitors for an additional fee, offer flexibility to galleries and discretion to buyers and sellers.

“You plan it very carefully,” said Marc Glimcher, president of Pace, a leading international gallery. “It’s not like you put a bunch of things in a private room and hope for the best.”

Demand for private rooms is on the rise, according to organizers of the fair, which drew almost 100,000 people last year. The 12 showrooms at this year’s event can be reserved hourly, daily or for the entire week. They’re available on a first-come-first-served basis for as much as $3,000 for a two-hour slot.

“We offer the showrooms as an additional opportunity for our galleries to present great works of art in their inventory to their clients in a quiet setting,” Dorothee Dines, a spokeswoman for the fair, said in a statement.

Works are often shown privately because owners don’t want everyone to know they’re parting with a prized Warhol or Rothko. And some buyers don’t want to be seen splurging on high-value art.

“A lot of people like the idea of looking at the work of art without other people looking at them,” said art adviser Abigail Asher. “They like that sense of exclusivity.”

This year’s fair includes an 12-foot-tall heart sculpture by Jeff Koons, an early conceptual panting by John Baldessari with an $8 million price tag, and Picasso’s portrait of his son that was once owned by Gianni Versace, for $7 million.

Private rooms are particularly valuable for galleries because they aren’t allowed to switch around works in their booths during show hours.

“Some collectors are there for just one day,” said art adviser Todd Levin. “Galleries want to do whatever they can to transact.”

Off-the-floor transactions are often shrouded in secrecy as market participants are reluctant to discuss even seemingly innocuous details like the artist’s name. Local shipping and storage companies are equally tight-lipped.

Kraft E.L.S. AG, which specializes in transportation, storage and installation of art, leases private viewing rooms to clients at a daily rate of about 2,500 Swiss francs.

“The floor is so clean, you can eat off of it,” said Levin, who has viewed works by Rene Magritte, Cy Twombly and Jean-Michel Basquiat at Kraft’s warehouse. “It’s very discreet. There are different routes to access viewing rooms. You may bump into someone in the waiting area, but you never know for sure what they are there to look at.”

Galleries have used private viewing spaces at art fairs for years. But as paintings and sculptures have grown in size and value -- and the cost of exhibiting at fairs has surged -- small storage closets in booths no longer suffice.

Fritz Dietl, whose logistics company shipped enough art to Basel this year to fill three jumbo-jets, recalled the days when dealers visited storage rooms with clients, took an artwork from the crate and showed it leaning against the wall.

“It didn’t cost anything,” he said. “Then the fair got smarter.”

Some exhibitors, like Galerie Gmurzynska, are building private viewing rooms within their booths.

That allows clients to look at art without “everyone breathing down their neck,” said Chief Executive Officer Mathias Rastorfer. “If you are an important collector it’s very difficult to peacefully walk around and look” at Art Basel. “It’s become very aggressive.”

For dealers who aren’t showing at the fair, private rooms at the off-site warehouses offer a way to take advantage of the Art Basel moment on their own terms.

“When people are coming to Basel they are in a money-spending mood,” said Jeremy Larner, a New York art dealer.

Two years ago, he sold a $5 million painting out of an Airbnb during Art Basel. Next week, he’s renting a viewing room at a warehouse to showcase four paintings by Rudolf Stingel, an artist with a current retrospective at Basel’s prestigious Beyeler Foundation.

“This is the time to do it,” Larner said. “It’s one thing to show someone something on the iPad, but showing it in the flesh is so much better.”

To contact the reporter on this story: Katya Kazakina in New York at kkazakina@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum

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