Luxury homebuyers can now get an art collection as part of the deal

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Luxury homebuyers can now get an art collection as part of the deal

The Los Angeles-based real estate company The Agency sells houses with artwork and furniture. The work shown is called “The McCoys II” (2019) and is by the artist Shaina McCoy.

The Agency | Nils Timm

When Paul Lester started working at a luxury real estate agency in Los Angeles, he decided to organize a Beverly Hills property viewing with a difference: He turned it into an art exhibition and invited potential buyers of the house – and anyone who might be interested in purchasing the artwork on display there.

Individual artworks were sold, as was the property – and at a higher price. “We were able to sell the house, and I would say at a higher price than you would expect, because the whole package was considered high-end,” Lester told CNBC by phone. The buyer also purchased some of the artwork on display.

That was more than a decade ago. Since then, Lester has made it his mission to present not only designer furniture but also “significant” works by contemporary artists in the luxury properties he offers, which are often also for sale.

Lester, a partner at real estate firm The Agency, is currently selling several newly built luxury homes in Beverly Hills designed by the architectural firm Olson Kundig, and has assembled a “complete collection” of art in some of them.

Paul Lester, a partner at Los Angeles real estate firm The Agency, said he has made it his mission to display artwork in the properties the firm sells. Seen here is the interior of a home that is part of a collection called The Houses at 8899 Beverly. The artwork is “Rainbow Universe” (2015) by Lazaros.

The Agency | Nils Timm

The homes – known as “The Houses at 8899 Beverly” – start at about $5 million. Rather than being temporary “staging pieces,” the artwork and furniture can be purchased, Lester said. The agency worked on the homes with consulting firm Creative Art Partners, which features work by a number of artists, including Michelle Mary Lee, an art educator, and Irvin Pascal, a British sculptor and painter.

Move-in-ready homes, so-called “turnkey” properties, are becoming increasingly popular with buyers. “We're seeing more people right now — especially in new construction — wanting a total package that works well,” Lester said. “There are situations where people come in and say, 'I want this room… I'll take the furniture and the art. I love it like this and is that possible?' And we can say, 'Yes, that's it,'” Lester said.

The trick to choosing artwork for such properties is to make sure it works well with the interior design, says David Knowles, founder of art consultancy Artelier, which supplies art for real estate projects in the UK, US and Middle East.

“It's hard to convey a certain uniqueness and character when you're selling a turnkey project because the … art has to appeal to a broad audience,” Knowles told CNBC by phone. “The art has to feel like it belongs there,” he said.

To achieve this, Artelier can commission pieces that relate to the area the home is in and have artists create pieces that fit the exact dimensions of the space. This tends to work better than borrowing work from a gallery to temporarily display in a home, Knowles says.

Artelier, an art consultancy, commissions work to fit the dimensions of a wall or panels, as seen in this living area of ​​a house in Eaton Place, London.

Fenton Whelan | Artelier

Lester's team discusses whether the art should match the design of the home or contrast with it. They might choose a colorful palette for a more monochrome property, or a mix of abstract work and portraits, Lester said. Sometimes work is commissioned for estates; other times Lester asks artists if they have pieces available in a particular color.

Artelier has sourced artworks for the walls of some of the world's most prestigious addresses, including One Hyde Park in London, the residences at the Dorchester's One at Palm complex in Dubai, and an apartment in Eighty Seven Park, an oval building on Miami's beachfront designed by Renzo Piano.

London developers want to appeal to foreign buyers looking for holiday homes in the city, says Knowles. The consultancy is hired by interior designers or property developers to source artwork for wealthy property buyers who “know what they like and who have good taste. Or they have someone who works for them who has good taste,” says Knowles.

Artelier often acts as a bridge between artists and developers or property buyers, groups that “come from two different worlds,” says Knowles. He works with artists to convey to them that their work can be considered a luxury product and that clients expect something “out of the ordinary.” At the same time, Artelier explains to clients that a custom ceramic piece will likely have imperfections such as fingerprints.

Artelier has commissioned a collection of artworks for the public spaces of One at Palm Jumeirah, Dorchester Collection, a residential building in Dubai. The artworks on display are by textile artist Kristy Kun.

Tooze Studio | Artelier

For Lester the artwork in The Houses at 8899 Beverly creates an additional marketing opportunity. “We're about to launch a campaign that puts the artists at the center… which I've found to be very effective. So in effect, you get another opportunity to tell the story of the house because you're telling the story of the art at the same time,” he said.

The homes are comparatively more affordable than other properties Lester has on his books. “I have several currently that are being offered privately … The house might be worth, say, $60 or $70 million, but the artwork in the house is probably worth $200 million,” he said. Buyers of that size might inquire whether the seller would consider selling one or two of the artworks, Lester said.

Although estate agency Savills rarely sells artwork as part of property deals, Richard Gutteridge, the company's co-head of prime locations in central London, advises his clients to leave the artwork hanging on the walls during viewings.

“It is an accessory that many people identify with. In the upper market segment, it is a layer [that] lifestyle,” he told CNBC by phone. Gutteridge oversees sales in what he calls the city's “golden postcodes” – Belgravia, Chelsea, Knightsbridge and Mayfair. He said a home's art collection is occasionally worth as much as the property itself.

“As much as that helps, [sales] Travel, it is quite nice when [buyers] “Focus on the house again… The artwork is often what draws people’s attention,” Gutteridge said.