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Sotheby’s York Avenue premises in New York. Image courtesy of Sotheby’s.

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A renovation project is now under way at Sotheby’s Manhattan headquarters that will expand its New York gallery space by one third.

Sotheby’s says the viewing and exhibition space at 1334 York Ave will grow from 67,000 to 90,000 sq ft.

“Our new exhibition space will exceed that of major institutions, including The Broad, the Whitney Museum of American Art, and the Uffizi,” said CEO Tad Smith.

“When finished next April, we will have enough space to put our next two competitors into our galleries with room to spare, which will provide a powerful marketing advantage for consignors.”

The 10-storey glass and granite property, occupying an entire block on the east side of York Avenue between East 71st and East 72nd streets, was built specifically for Sotheby’s in the 1980s.

The start of works at 1334 York Avenue ends speculation that the firm was looking to decamp from the Upper East Side or perhaps sell the building.

Last year Sotheby’s employed a broker to market the property, with a potential sale including a short-term leaseback that would have allowed a move to a new location.

Smith said that Sotheby’s in London and Paris are also “sprucing up their own galleries in a more limited fashion”.

The announcement of changes to the fabric of Sotheby’s NY building formed part of the auctioneer’s most recent filing of financial results.

According to the figures, published last week, Sotheby’s made more sales but at lower margins in the first half of 2018.

Margins down

Auction sales for the first half of the year to June 30 of $2.85bn (up 19% on 2017), from more than 23,000 lots, are close to the highest in the company’s history. Private sales in the same period were also up, by 63% to reach $543m. However, net income was down by 23% to $50.8m – reflecting a significant drop in auction commission margins that averaged out at 15%.

The company was negatively impacted by the shortfalls on two guaranteed paintings which alone reduced the commission margin by 1.1% across the six-month period. Modigliani’s Nu couché (sur le côté gauche) sold for $139m in May against an estimate ‘in excess of $150m’, and Buste de femme de profil (femme écrivant) by Picasso sold in London at £24m against an estimate believed to be more than £30m.