Art Market

Downtown New York Galleries React to a Changing Scene

Maxwell Rabb
Oct 18, 2023 2:14PM

Exterior view of 1969 Gallery. Courtesy of 1969 Gallery.

Exterior view of Thierry Goldberg Gallery. Courtesy of Thierry Goldberg Gallery.

On October 7th, Denny Gallery, a staple of downtown New York’s art scene, shut its doors permanently after 10 years in Tribeca. This development, on the heels of the closures of Queer Thoughts, Foxy Production, and JTT, marks the fourth shutdown of a tastemaking gallery in downtown New York—the neighborhoods below 14th Street in Manhattan—in the space of three months. While each gallery cites different reasons for shuttering, the number and pace of the closures is alarming.

In recent years, more than 60 galleries have opened in Tribeca and SoHo. According to data from the Association for Neighborhood and Housing Development, retail rents dropped 17% in Lower Manhattan between 2019 and 2021 compared to 2018—a major impetus for galleries to relocate downtown, and a shift that created a new community-driven scene in the process.

“First of all, galleries closing, especially in the neighborhood, is never a good feeling,” said Quang Bao, founder of 1969 Gallery, which moved to Tribeca in 2020. “Bars love bars, and galleries love galleries because we bring our audiences to one another, and they float in between all the spaces.”

But recent rises in rental prices have become a pressing concern. According to CBRE, the average requested rent retail areas reached $645 per square foot in Manhattan, marking a 1.2% rise from the previous quarter—the fourth straight quarterly uptick. This has taken place against broader economic uncertainty around interest rates, inflation, and other issues that the art market at large has been affected by. In the first six months of 2023, overall global auction sales from Christie’s, Sotheby’s, and Phillips decreased 18% since last year, according to ArtTactic; and wider uncertainties are being observed at all levels of the market.

Exterior view of New Collectors. Courtesy of New Collectors.

Exterior view of New Collectors. Courtesy of New Collectors.


For Sibilla Maiarelli, director and founder of Lower East Side gallery New Collectors, various options are being weighed in an art market that is far from certain. “The biggest anxiety is that collectors will slow down on buying artwork,” Maiarelli said. “Then, of course, you have situations where landlords are raising the rent. So, I’m going to have to figure out in a little under a year whether I’m going to stay and pay more to be on Henry Street and be a storefront, or if I need to downsize, or if I’m going to join forces with someone else.”

That said, running a gallery “gets more precarious on a larger scale because you have higher overhead, you have employees, you have their benefits, you have more insurance, you have a storage unit,” Maiarelli cautioned. As galleries expand, they take on more risk, both in sales and internal expenses.

Exterior view of LATITUDE Gallery. Courtesy of LATITUDE Gallery.

The market downturn evokes déjà vu for Shihui Zhou, the founder of LATITUDE in Chinatown, saying it mirrors the uncertainty that enveloped the art industry during the pandemic. “We’re so seasoned with fluctuating markets and lean years, given the fact we started in 2020,” she told Artsy. But since then, the gallerist, primarily supporting the art of emerging Asian artists, diligently maintains LATITUDE’s schedule against this backdrop.

“With the unpredictability of the art market and broader economic shifts, I frequently switch to backup plans to ensure the gallery stays on track,” Zhou said. “For instance, if there’s an unexpected hiccup with artists or shows, I’m quick to jump to a ‘plan B.’ And when sales are slow, PR becomes our focus. The reality is, without a robust lineup of solid plans and shows, bills start piling up. Plus, without the right buzz for a young gallery like us, pushing work becomes challenging on all fronts.”


These increasing financial challenges are forcing gallerists to tread more cautiously. For Natalie Kates, co-founder of KATES-FERRI PROJECTS, which opened its anchor location on Grand Street in 2022 and expanded into its neighboring storefront in September, big bets on artists or art fairs can risk jeopardizing their operations.

“We generate 50% of our sales through the art fairs, which are also costly for us. It’s a big gamble, but it could also be a big reward,” Kates told Artsy. Yet for her and many other downtown galleries, fiscal concerns limit their options. “The biggest challenge is being able to have your point of view within a budget that is sustainable because we want to give the artists the moon, and sometimes that’s not realistic.”

This uncertainty in market dynamics, coinciding with rent spikes, presents new challenges for owners, especially for galleries operating on thin margins. Still, Ron Segev, co-founder of the longstanding Thierry Goldberg Gallery, which opened its doors in the Lower East Side in 2007, remains optimistic about the art market’s long-term resilience, likening the current moment to the rise of “Zombie Formalism”—a repetitive, process-driven contemporary abstract art trend that many accused of tanking the art market in the early 2010s.

“It’s always sad to hear about gallery closures, and unfortunately, we’re not out of the woods yet,” Segev said. “These closures are without a doubt related to the general slowdown in the art market. Those of us who work with young artists still remember the Zombie Formalism crash that occurred about seven to eight years ago and the 2008 crash that took place seven to eight years prior to that. The art market is cyclical.”

Maxwell Rabb
Maxwell Rabb is Artsy’s Staff Writer.

Correction: A previous version of this article featured the wrong spelling of Sibilla Maiarelli.