Art dealerships protect themselves by buying spaces as market booms
It’s no secret that Chelsea has become a hotbed for art, but just how many galleries have set up shop in the far West Side neighborhood?
“Some mornings I wake up and read a review of a gallery that I didn’t know existed,” says Perry Rubenstein, who lives on 23rd Street west of 10th Avenue and has three gallery spaces in the neighborhood. “And it turns out to be down my block.”
In little more than a decade, the former warehouse and industrial area has become home to more than 300 galleries, according to chelseaartgalleries.com, an online guide to galleries and art.
The number of art dealers lining up for space in the gallery district, which stretches from 13th to 29th streets between Seventh and 11th Avenues, seems unending. Dealers seem confident that despite the rising rents, the area will not become another SoHo, where art was replaced by more lucrative retailing.
In Chelsea, rents have more than doubled over the past five years—to $85 per square foot for ground-floor space and $40 for upper-floor space, says Michelle Stone, managing director of Sinvin Realty Corp. and a resident of the district. New space for sale, meanwhile, is going for upward of $1,000 per square foot.
Natural selection hasn’t kicked in
“When you hear 300 galleries, you think, ‘How could they all possibly survive?’” says Ms. Stone. “But they all seem to be holding their own, and that shows how strong the art market is.”
Chelsea’s gallery total easily exceeds that at the high point of SoHo, brokers and gallery leaders agree. What’s more, the total almost entirely comprises serious dealers—there are few of the poster and print shops that dotted SoHo in its heyday, says Ron Warren, a director at the Mary Boone Gallery.
“I don’t think there has ever been the density of galleries in New York as in Chelsea,” says Mr. Warren, noting that Mary Boone was one of the area’s pioneers, opening its space at West 24th Street in 2000. “The market is so huge, it’s really bewildering.”
One simple reason for Chelsea’s abundance is that the art world, fueled by a surge of money coming increasingly from overseas, is spawning more dealers, galleries and buyers. Another is that the gallery district has acquired such cachet that even galleries long situated uptown have opened outposts there.
“This is the area almost everybody needs to be in,” Mr. Rubenstein says.
Some dealers are buying newly built space—and paying dearly to do so. At the 20-story Chelsea Arts Tower, under construction at 526 W. 25th St., developers Bass Associates and Young Woo & Associates stand to reap upward of $1,000 per foot.
Marlborough Gallery, which already has space on West 57th Street, ponied up for the full first and second floors—9,500 square feet in all—according to the building’s broker, Grubb & Ellis Co.
Waiting their turn
Chelsea’s gravitational pull extends around the nation and abroad, brokers say. Joseph Aquino, executive vice president at Prudential Douglas Elliman, estimates that 35 dealers are looking for gallery space right now—and there is too little space to accommodate them.
“It’s a very tight market right now,” he says. “There’s maybe room there for another half-dozen.”
Among the international arrivals is Bodhi Art, a gallery based in India and Singapore, which recently took 6,000 square feet on the fourth floor at 535 W. 24th St. The six-story building has one gallery space left, says Ms. Stone, the landlord’s broker. A Chinese gallery has made an offer for it.
But Chelsea’s gallery explosion and its rising prices are already stoking fears that the art community that made the neighborhood hot will be priced out of it—the so-called SoHo effect.
“Anyone with any sense should be reasonably concerned about the market sustaining itself at these levels,” Mr. Rubenstein says. “If the art market were to tighten, it would create a lot of pressure.”
But Ms. Stone argues that there’s a big difference between Chelsea and SoHo. Chelsea pioneers such as Paula Cooper, Matthew Marks, Barbara Gladstone and Metro Pictures sought stability by buying their space, she points out. As a result, “Chelsea is not going to change the way SoHo changed,” she says.
Mr. Warren agrees, even though Mary Boone rents its Chelsea space because it could not find exactly what it wanted to buy.
“Galleries tend to own, and that has given confidence to the area,” he says. “Galleries don’t feel like they are going to be driven out like they were in SoHo.”