The art dealer Michele Maccarone is sitting with Alex Hubbard, one of her star artists, in the restaurant Redbird in downtown L.A., five minutes from her new 50,000-square-foot gallery. Maccarone is there to scope it out for the Sept. 19 celebration of the inaugural show, a solo exhibition of Hubbard’s work. Instead of discussing the food or art, they’re talking about natural disasters.

“It will start raining at some point,” says Maccarone, who already owns two galleries in New York’s West Village. “My only concern is that this drought may cause an earthquake before then.” She recently brought in an engineer to Hubbard’s studio, which is in Maccarone’s building, to determine what to do in the event of what Hubbard calls “the big one.” In case the walls start coming down, she says, “we have to figure out where you need to stand. Can we work on that please?”

Maccarone, 41, has dark brown, shoulder-length hair, and wears giant black sunglasses. She has an expressive face, one moment frowning in disgust, the next grinning broadly. She loves to curse, mostly at herself and the world rather than anything specific. Dressed in a dark linen jumpsuit and black high-heeled clogs, she casually mutters an expletive as a cookie plate arrives at the table. “That looks interesting,” she says and digs in.

Since Maccarone opened her first New York space in 2001, in a crumbling building on Canal Street, the art market has changed dramatically, growing from $19.9 billion, according to the TEFAF Art Market Report, to more than $54 billion in 2014. Rather than lifting all participants, the wave has caused some galleries to bloat to previously unimaginable proportions while threatening to capsize smaller outfits such as Maccarone’s. Through close artist relationships and savvy selling, her New York space has not only remained afloat, but become profitable. With the new L.A. outpost, Maccarone’s hoping to shed her boutique status and solidify a spot among industry overlords such as David Zwirner and Larry Gagosian.

Maccarone was born in New Jersey, the daughter of a hairdresser and a homemaker. Her parents saved for years so she could go to Barnard College in New York. In 1991, as an undergraduate, Maccarone began to intern at the Luhring Augustine gallery, which represented a number of artists who’d go on to be among the hottest of the mid-1990s, such as Christopher Wool, Paul McCarthy, Christopher Williams, and Larry Clark.

At the time, the contemporary art scene was still reeling from the wild boom and bust of the ’80s. Sales were subdued. In 1995, $256.6 million of postwar and contemporary art sold at auction, which today would just barely buy the top four lots from Christie’s May 2015 postwar and contemporary sale. “There were a lot of substantial galleries, but art wasn’t flying off the walls,” says Thea Westreich, an art adviser who was active during the period. “It was not necessary to get on a waiting list, and one could establish relationships with gallerists and artists that were meaningful and fulfilling.”

Maccarone worked her way up, becoming a director of Luhring Augustine in 1997. “You have to understand that in the 1990s, art did not sell,” she says. “So a lot of what I did was just talk.” Many of the gallery’s artists made challenging, conceptual work: McCarthy’s art dives into the psychological recesses of pop culture, while Williams’s explores the mechanics of photographic representation.

“You explained and told the story—I had relationships with collectors based on conversations,” Maccarone says. “I would talk about the work, and they would eventually, maybe come back to the gallery and buy.”

In 2000 she left Luhring Augustine and spent a year curating shows and brokering independent sales between artists and collectors. The idea to open her own space had come a few years earlier, when she noticed that several notable European artists didn’t have U.S. gallery representation. Seeing an opportunity, she arranged with one of those artists, the Swiss-born Christoph Büchel, to sell two of his works to a collector. They went for $30,000 to $50,000 each, Maccarone says, and she used the commission to fund her own gallery’s 2001 launch, which featured an installation by Büchel that ripped through multiple floors of the building. Composed of materials like a pile of roofing material, an exercise bike, a fake classroom, and a plywood bed, the show required visitors to crawl through parts of it on their hands and knees.

Although the opening was met with critical acclaim, Büchel’s artwork didn’t sell. It was too eccentric and impossible to install in a residential setting. “I think it’s still sitting in my parent’s basement,” Maccarone says.

For years she continued to put on virtually unsellable shows. They were funded by more marketable works created by the same artists, such as Christian Jankowski, a German best known for performance art and video, and Anthony Burdin, an American multimedia artist. Büchel, for instance, created several works for $10,000 to $15,000, which, Maccarone says, he knew would sell. “He was really generous in that way,” she says. But eventually her business plan, which included showing the art she loved and still covering all operating costs, began to falter.

Maccarone had to pay artists’ studio and production costs upfront (which is standard for the industry), and these would only be recouped once the artwork sold, a process that could take months or years—if it sold at all. In 2006, without putting thought into the financial implications, she moved the gallery to a bigger space in the West Village. “It was very expensive to renovate, and I didn’t have the money,” she says.

Overextended, Maccarone teetered on the edge of bankruptcy. “I would go online and look for jobs,” she says. “I was maybe going to get a real estate license. I was like, ‘This is it. It’s over.’ ” Some artists, unpaid for years, left the gallery. Others stayed out of loyalty. “When times were chaotic financially, it was still worth it,” says the artist Nate Lowman, who’s been represented by Maccarone since 2003. “It’s the richest experience I’ve ever had. She loves art, not because it’s expensive, but because it’s interesting. She’s an intellectual, always present and always thinking.”

In 2007, Maccarone had what she calls a “come to Jesus” moment and began to take on artists whose studio costs were lower. It took two years to rein in costs and return to profitability, but by 2009, she’d reached a point, she says, “where I could finally breathe.” Today, she says, “the gallery makes millions of dollars a year, obviously. A gallery this size wouldn’t be in business if it didn’t.” She adds, though, “Every time I make money, I immediately blow it, taking on an artist or funding a project.” She expanded her West Village space in 2012, so she now has two galleries in the same building that can show exhibitions simultaneously.

Maccarone’s clients include “collectors in finance who’ve been buying since their first paycheck,” she says. “A lot of them are at an institutional level, in terms of being on museum boards.” The multibillionaire hedge fund manager Steve Cohen, one of the world’s most prominent art collectors, is one such buyer of her artists’ works.

She now has a house in Amagansett, N.Y., recently bought a midcentury home in the Bel Air neighborhood of Los Angeles, wears a stainless-steel Rolex, and carries designer handbags. She’s a solid 4.0 tennis player, and before she sprained her foot on the day Novak Djokovic beat Rafael Nadal at the French Open this spring, a moment she describes as “devastating,” she played every day. She follows the pro tour religiously and has an encyclopedic knowledge of even lesser-known players. “I love Ernests Gulbis,” she says of the Latvian men’s singles player, currently ranked 81st on the tour. “I’m very into him. He’s a total weirdo.”

Her artists are also thriving. In a major coup, she began last year to represent the estate of Sarah Charlesworth, a photographer associated with conceptual art. In June an exhibition of Charlesworth’s work opened at the New Museum. Another artist, Rodney McMillian, will have solo shows at the ICA Philadelphia, the Studio Museum in Harlem, and MoMA PS1, all in 2016.

Maccarone recently began to work with the painter Cecily Brown, who left the Gagosian Gallery a year ago. Brown’s decampment from Gagosian, the most powerful gallery in the world, isn’t simply good fortune for Maccarone. It’s a sign that her reputation and smaller size continue to be a strong draw.

So why is Maccarone risking millions of dollars on an enormous West Coast gallery? “This goes back to what the global art market is about these days,” says Marion Maneker, founder of the Art Market Monitor, an industry news website. “It’s about participation in this wealthy, highly mobile milieu, and having these multiple spaces is showing your clientele that you’re with them.” Gagosian Gallery has 15 locations. Hauser & Wirth has five, with a sixth on its way. Pace Gallery has eight. David Zwirner Gallery has three. “If nothing else, you have to show that you’re successful,” Maneker says.

“I’d like to be considered one of the premier American galleries,” says Maccarone. “Los Angeles is one of the major American cities where art is shown and produced, and so to go forward with this is to solidify my position.”

This one-upmanship is great news for collectors: There’s more artwork than ever and more places to see it. But there’s a downside, too. With financial imperatives, there are fewer opportunities for the average Chelsea gallery-goer to encounter interesting, challenging works. “It is still possible to engage with art and artists and even gallerists,” says Westreich, the art adviser. “But I think it is increasingly more difficult to cut through the ever-growing market machinations.”

Maccarone says the expansion isn’t just about glitz. The new building, which is being renovated by Standard Architects, is also explicitly for her L.A.-based artists. “I didn’t need to do this,” she says. “I didn’t need to spend this kind of money. I did this expansion because I really believe in my artists. It’s all about this bigger idea, to create a wonderful exhibition space that gives a museum level to my artists, who I believe are a part of art history.”

Maccarone already has several major collectors in Los Angeles such as Peter Morton, co-founder of the Hard Rock Cafe. “West Coast clients will be in closer proximity to Michele on a regular basis,” says Morton. “She’s opening with an Alex Hubbard show, which would formerly be something you’d see if you were planning to go to New York. Now we have it in our backyard.” That could mean a larger collector base. Maccarone estimates that currently her gallery has about 10 hyper-involved collectors, an additional 40 to 50 occasional clients, and then 100 or so buyers “who buy something once,” she says. “That might sound small, but what I do is very specific. How much of this very expensive thing can someone buy?”

But selling artwork, says Maccarone, is not the same thing as selling out. “I’ll always cut into profits to do something exciting,” she says. “To just be a shopkeep and move merchandise—that was never an interest.”