A new era for high-end real estate sales

The world of high-end real estate sales, led by auction houses like Sotheby’s and Christie’s, has a long tradition of tactile components: thick, glossy sales catalogs that are shipped to collectors around the world; the immersive and meticulously designed exhibitions that welcome thousands of visitors; the blades that used to bid in live auctions.

But when Covid-19 appeared in early 2020, some basic aspects of the business were forced to take a back seat. The commercial halls closed in all major cities. Travel restrictions limited commercial flights, established specialists in auction houses who could spend more than 150 days a year traveling to meet customers, examine farms, and make face-to-face appraisals. Collectors were terrified, for fear of market volatility. Even the prized sales catalogs were paused because the workers were not in the office to physically mail them.

Could the industry survive its important spring season as a global health crisis unfolded? The answer depended on whether auction houses and collectors could pivot toward virtual sites instead of brick and mortar sites.

Video call ratings

Capturing a collector’s ethos and lifestyle and then translating it into a compelling narrative is key to successfully marketing a high-end estate sale. The process traditionally consists of specialists in auction houses who visit properties and meet with relatives or other estate representatives.

To prepare to sell the collection of the late Mario Buatta, for example, Sotheby’s experts immersed themselves in the interior designer’s most famous tastes while making inventories in his Upper East Side apartment and the Connecticut country house Dennis Harrington, head of The English and European furniture department of the auction house in New York, which oversaw the sale, said in an interview in April 2020. The properties featured neo-Gothic furniture lacquered, English and Chinese export porcelain and a wide collection of ornate paintings for dogs.

A few months after the sale of the Buatta collection in January 2020, for 7.58 million US dollars, these face-to-face rituals were supplanted by video calls. FaceTime and Zoom do the job, but they can be frustrating to use because you lose a sense of intimacy, experts say.

“When we collaborate with lawyers, the surviving spouse, the children, that time is so valuable because it’s what we use to create a bespoke exhibit,” says Mari-Claudia Jiménez, president, CEO and head of development at worldwide business, fine arts world at Sotheby’s, which oversees real estate sales. “When these face-to-face visits don’t happen … it gets a little more clinical and it’s harder to really capture the ethics of who the collector was.”

In 2018, Christie built a bird simulation to house Rockefeller’s collection of porcelain figurines.

Courtesy of Christie’s

Interactive virtual exhibitions

Once classified, evaluated, and labeled, they are usually displayed in museum-quality exhibits to attract potential buyers during events before the auction begins.

Prior to Christie’s record sale of US $ 835 million from the Peggy and David Rockefeller estate in 2018, employees designed and built a bird simulator to house Rockefeller’s porcelain mouse and bird figurine collection, with calls for embedded birds specific to the actual species depicted in the figurines, according to Liz Seigel, vice president and specialist in private and iconic collections. Nearby, a massive wicker picnic basket contained a silver cutlery and ornate plates, as if the Rockefellers could sit out to eat outdoors at any time. The basket, a gift from the King of Morocco, sold for $ 212,500. The New York exhibition attracted 30,000 visitors over ten days.

Marketing strategies driven by what is tangible and aspirational tend to get big budgets from auction houses, but in the last year employees have been quick to translate these strategies and change resources to immersive digital formats that go beyond from photo galleries. Multimedia items that were once considered enjoyable, such as virtual tours of showrooms, interactive educational seminars, and video interviews with collectors, have become essential to capturing the imagination of potential home-sitting shoppers. on their screens.

As part of a list of new digital offerings launched last summer, Sotheby’s introduced an augmented reality feature to its app so people can see a work of art on their wall before bidding. He also added a “BuyNow” market with art and items that can be bought to order.

Blue vases mounted in ormolu by Louis XVI from the sale of the estate A. Jerrold Perenchio.

Courtesy of Christie’s

Offers from the sofa

As pandemic stops spread across continents, auction houses moved quickly to offer only online sales of small luxury items such as watches, handbags, footwear and other items for the style of auction. life, postponing many scheduled real estate sales linked to live events. The property of Texas heiress, rancher and oil philanthropist Anne Marion, for example, chose to postpone the sale of her collection from 2020 to May 2021 due to market uncertainty due to the pandemic, according to Jiménez. Christie’s also postponed the auction of the estate of former Univision CEO and philanthropist A. Jerrold Perenchio, who died in 2017.

The fast pivot helped auction houses stabilize falling sales in the second half of 2020. Live streaming has also become a more important tool, allowing auctioneers to make sales from theaters. real-time physical exposures while bidders make calls or bid online.

And it’s not just interesting items at a lower price. “We were amazed at the incredible participation of our customers in this virtual world,” Jiménez says. “They were completely comfortable buying US $ 100 million paintings over the phone, virtually without ever having seen them.”

A growing number of people under the age of 40 have been involved in all of Sotheby’s online sales over the past year; and in most of these sales, 40% of participants are new customers, according to Jimenez.

Christie’s launched its digital sales platform owned by Elizabeth Taylor in 2011 and has since offered many digital sales, but usually in parallel with a live auction. But the pandemic sparked a ball that prompted the institution to “recalibrate” to meet customer needs when it could not rely on its showrooms and print catalogs to market farms in the same way it did in the past, says Gemma Sudlow, senior vice president. president, head of private and iconic collections and decorative arts.

A key turning point for Christie’s was in September 2020, when it offered a virtual-only version of the Perenchio collection, a traditional single-owner estate. The multi-day auction was the first among a handful of real estate sales that Christie’s moved online because of Covid-19, with no catalog or large-scale exposure. The $ 6.5 million result was consistent with expectations if the Perenchio collection had been auctioned off in the traditional way, Sudlow says.

As more people are vaccinated and some showrooms begin to open, Sudlow expects the industry to evolve into an analog-to-digital hybrid, with online sales offering opportunities for customers to achieve comparable financial returns.

Of course, he says, “There will still be sales that we will definitely recommend selling as live auctions, with physical exhibits, that won’t go away.”

This article appeared in the June 2021 issue of Penta magazine.

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