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Mona Leaser


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Mona Leaser

Fineartlease.com lets customers rent works of art

When Foye Johnson throws a family party in late January, the walls of his New York apartment will be adorned with the works of such famous artists as Helen Frankenthaler and Hans Hofmann, who lived and worked in and around Provincetown, Mass., where Johnson grew up. Johnson doesn't own the pieces, which can sell for between $50,000 and $1 million. Instead, he plans to spend as much as $20,000 to rent them from Fineartlease.com, an Internet upstart that leases art for anywhere from a few hours to 10 years.

The party is a lark, but Johnson also uses Fineartlease.com at work--to supply photos for the walls of Hybrid Recordings, an independent record company where he works. Not only can leasing art be cheaper than buying, it's also a tax deduction. "Working in a small record company, you don't have the resources to be extravagant," Johnson says. "This makes sense."INSURED BY LLOYD'S. This is exactly the kind of math that Fineartlease.com is hoping more people will do. The New York-based startup made its debut on Dec. 1, dishing up 300 pieces, from 16th century masters to contemporary abstracts, culled from a network of 60 galleries and museums around the world.

Other online companies are trying to capitalize online on the $17 billion market in fine art. But unlike startup NextMonet.com, which sells contemporary art, or Sotheby's, with its online auctions, Fineartlease.com aims to give corporations and individuals the cachet without tying up cash. "It's a very original concept," says David Kusin of Kusin & Co., a Dallas art research firm. Galleries and museums like the idea because they can get income from pieces that otherwise might sit in warehouses. "It's a venue for another public that we don't have now," says Alexander Haas, who handles the estate of 450,000 photographs by his father, Ernst Haas.

And don't forget that tax deduction. While art owned by companies is a taxable asset, leased art can be deducted as a cost of doing business. Of course, then you won't capitalize on any appreciation if you buy well--unless you sell it to Fineartlease.com and lease it back.

Leasing also opens the door to individuals who might not want to take on the financial risk of an outright purchase. But Fineartlease.com is betting individuals will end up buying their pieces anyway.

A couple of key things make the service possible. One piece of the puzzle was bringing Lloyd's of London onboard to insure the art. Then, there's the Net itself, which makes it possible to match up potential customers and galleries or museums. "Without the Internet, you couldn't create an effective way to distribute this," says Ian Peck, the company's 32-year-old founder. The company has raised $1.5 million so far and plans to raise an additional $10 million to $15 million in the next couple of months. Within a year, the service will offer as many as 40,000 pieces, says Peck.

The service is fairly straightforward. Clients pay fees that range between 13% and 20% of the painting's value. For instance, a $75,000 painting could lease for $400 a month over three years. About half a dozen customers are leasing art so far. The biggest challenge: getting a broad selection of good art. That means persuading galleries to tie up potentially salable pieces in leases, and that's no easy sale.By Heather Green in New York


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