The auction of a Giacometti sculpture on Tuesday failed when bids petered out below Sotheby’s $70 million estimate, raising alarms that all may not be well in the art world. But at virtually the same moment that auctioneers were withdrawing the work, called “Grande tête mince (Grande tête de Diego),” fresh evidence of the art world’s vitality emerged from Queens in the most prosaic way imaginable: a mortgage refinancing.
The $143 million loan was for a 280,000 square-foot warehouse in Long Island City that’s used by the Metropolitan Museum of Art and top collectors to stash their stuff. As part of the transaction, credit-rating agency KBRA said in a report Thursday that developer Steven Guttman extracted $64 million in cash from the property. As it happens, that’s the same amount bidders maxed out on for the Giacometti.
The Queens warehouse, called UOVO QPN, never makes blockbuster deals like auctioneers are known to do. Indeed, its 2023 net operating income of $13.1 million wouldn’t have been quite enough to pay for a different Giacometti bust, called “Buste,” which sold for $13.3 million at Sotheby’s last year. But business at UOVO QPN is rock-steady. Earnings rose by 3% in 2022 and 7% in 2023, while delinquencies are almost unknown because people who can afford to buy fine art can afford to store it.
UOVO QPN consists of two interconnected buildings developed in 2013 by Guttman, founder and chairman of Flatiron-based Storage Deluxe Management. His company has completed 84 projects holding 8 million square feet, and many of them operate under the banner of property manager CubeSmart. In October 2020, when most real estate deal-making was in deep-freeze, CubeSmart paid Storage Deluxe $540 million for 780,000 square feet of warehouse space in Brooklyn, the Bronx and Queens.
It cost $73 million for Guttman to develop UOVO QPN in 2013, KBRA said. The Met pays $63 a square foot for 22,000 square feet of space through 2026. Many tenants rent month-to-month.
Chanel’s chairman and controlling shareholder, Alain Wertheimer, rents 2,600 square feet of space on a monthly basis. Mexican collector Juan Antonio Pérez Simón’s art is also a tenant, as well as Ellen and William Taubman, whose brother Alfred was chairman of Sotheby’s. Average in-place rents for private space on the third through eighth floors are $98 per square foot, KBRA said. The occupancy rate in the private floors is 87%.
Storage Deluxe Management didn’t return an email seeking comment.
