Luxury Home Buyers Can Now Acquire an Art Collection as Part of the Deal

When Paul Lester joined a luxury real estate agency in Los Angeles, he decided to host a Beverly Hills property viewing with a difference: He effectively turned it into an art opening, inviting potential buyers of the home – and those who might be interested in purchasing. the work of art he exhibited there.

Individual works of art were sold, as was the property, for a premium. “We were able to sell the house, I would say, for a higher price than expected because the whole package was considered high,” Lester told CNBC by phone. The buyer also purchased some of the artwork on display.

It was more than ten years ago. Since then, Lester has made it his mission to feature “meaningful” works by contemporary artists – alongside designer furniture – in the high-end properties he offers, which are often available for purchase.

Lester, a partner at real estate firm The Agency, is currently selling several new luxury homes in Beverly Hills designed by architecture firm Olson Kundig and has amassed a “complete collection” of art in a handful of them .

The homes — known as The Houses at 8899 Beverly — start at around $5 million. Rather than just being “staging” pieces brought in temporarily, the artwork and furniture are also available for purchase, Lester said. The agency worked with consultancy Creative Art Partners on the houses, which feature the works of several artists, including Michelle Mary Lee, an arts educator, and Irvin Pascal, a British sculptor and painter.

Move-in ready homes, called “turnkey” properties, are becoming increasingly popular with buyers. “We’re seeing people more than we used to right now — especially with new construction — wanting a complete package that works well,” Lester said. “There have been circumstances where people would come in and say ‘I want this room…I’ll take the furniture and I’ll take the art. I love it that way and is that possible?’ And we’re able to say ‘yes,'” Lester said.

The trick to choosing artwork for such properties is to make sure it fits well with their interior, said David Knowles, founder of art consultancy Artelier, which provides artwork art for real estate projects in the UK, USA and the Middle East.

“It’s hard to convey some sort of uniqueness and character if what they’re selling is a turnkey project, because…art has to appeal to a broad audience,” Knowles told CNBC by phone. “Art has to feel like it belongs there,” he said.

To do this, Artelier can order pieces that relate to the area in which the house is located and ask artists to create pieces that will precisely adapt to the dimensions of the space. This tends to work better than borrowing works from a gallery to display temporarily in a home, Knowles said.

Lester’s team debates whether art should match or contrast with the design of a home. They might choose a colorful palette for a more monochrome property, or a mix of abstract works and portraits, Lester said. Work is sometimes commissioned for properties; other times, Lester may ask artists if they have pieces available in a particular color.

Artelier has sourced artwork to hang on the walls of some of the world’s most prestigious addresses, such as London’s One Hyde Park, residences at Dorchester’s One at Palm complex in Dubai, and for an apartment in Eighty Seven Park, an oval-shaped building. Beachfront building in Miami designed by Renzo Piano.

London developers want to attract foreign buyers looking for vacation homes in the city, Knowles said. The consultancy is commissioned by interior designers or real estate developers to find works of art for wealthy real estate buyers who “know what they like and have good taste.” Or they have someone working for them who has good taste,” Knowles says.

Artelier often serves as the bridge between artists and developers or property buyers, groups who “come from two different worlds,” Knowles said. He works with artists to help them understand that their work can be considered a luxury product and that clients expect something “exceptional.” At the same time, Artelier can explain to customers that a custom ceramic piece is likely to have imperfections, such as fingerprints.

For Lester, the artwork of The Houses at 8899 Beverly creates an additional marketing opportunity. “We’re about to launch… a campaign that’s going to highlight the artists… which I found very effective. So actually, you have another opportunity to tell the story of the house. because that you also tell the story of art,” he said.

The homes are comparatively more affordable than other properties Lester has on his books. “I have several right now that are being offered privately… The house is worth maybe, say, $60 million, $70 million, but the artwork in the house is probably worth $200 million “, did he declare. Buyers at this level might ask if the seller would consider selling one or two works of art, Lester said.

Although real estate agency Savills does not often sell artwork as part of a property transaction, Richard Gutteridge, co-director of the business in central London, advises clients to leave artwork on the walls during visits.

“It’s an accessory that a lot of people identify with. At the top of the market, it’s a layer of (that) lifestyle,” he told CNBC by phone. Gutteridge oversees sales in what he calls the city’s “golden postcode”: Belgravia, Chelsea, Knightsbridge and Mayfair. He said a home’s art collection is sometimes worth as much as the property.

“As much as it makes the (sales) journey easier, it’s kind of nice when (buyers) refocus on the house…Artwork often turns people’s heads,” Gutteridge said.