Former artist brokered biggest-ever city building sale

New York /
Nov.November 29, 2007 01:19 PM

If you asked Scott Latham 25 years ago what kind of business he envisioned doing with the Museum of Modern Art one day, it would not have been putting together a $250 million real estate deal for the institution.

In the days before he discovered his vocation as a big-time commercial broker, Latham was a destitute artist running around the East Village, Dumpster diving for “found art,” spray-painting on vacant buildings, and traveling from gallery to gallery with slides of his paintings and collages, trying to get exhibited. He lived in a Chelsea loft with his wife and five others — dreaming big dreams, and eating small meals.

“We had a beautiful gas heater; we all used to stare at it wishing we could turn it on,” he says. “We used to go to Penn Station to get warm. I was going to be the next Picasso.”

Latham may not yet have established himself as that kind of art-world all-star, but it’s no surprise that MoMA went to him when they needed to sell some property last year. Latham’s talents as a deal maker have won him quite a following in real estate circles. Among his many noteworthy deals are January’s $1.8 billion sale of 666 Fifth Avenue to Kushner Companies — the highest price ever paid for a single building in the country’s history — and the $675 million sale of The Plaza Hotel in 2004.

This year overall, Latham has been on a tear, despite the credit crunch that has roiled the market since summer. Already, his team at Cushman & Wakefield has sold a whopping $6.1 billion worth of property. And they might not be finished yet, even if the markets are. “If the gods cooperate,” Latham says, “we should sell another one to one-and-a-half billion.”

“He’s a busy guy right now,” says Dan Fasulo, managing director at Real Capital Analytics, a real estate research and consulting firm. “You want to sell a building in Manhattan, there’s only a few houses in town to go to, and he’s one of them.”

East Village scene

It’s been a long road to the top of the real estate heap for the former Downtown artist, who is now a 49-year-old father of two with salt-and-pepper hair, a youthful face and a weekend art studio at his oceanside country home in Rhode Island.

Born in Vermont, Latham grew up in Mexico City — his father owned Coca-Cola bottling plants — then moved to Kansas City, Mo. For college, he attended the Rhode Island School of Design, one of the best art schools in the nation.

“Everyone at art school hears about how hard it is to make it,” he says. “When you’re young and idealistic, you ignore the warnings.”

Latham spent the summers of his college years working on commercial fishing boats off the coast of Rhode Island. After he graduated in 1981, he’d go out for six months at a time, then return to Manhattan and live off that money while trying to get gallery shows.

At the time, Latham was part of the gritty East Village scene that included Jean-Michel Basquiat and Keith Haring. It was an exciting era, filled with street art and performance art, and full of vibrancy and new ideas.

But it was a challenging existence for an unknown kid fresh out of school. Latham would pound the pavement, going from gallery to gallery with slides, often returning home with nothing to show for his efforts.

“They’d hold up slides for three seconds, and the response was, ‘We can’t use any of this. Come back in a few months,'” He recalls. “It’s a tough thing to deal with. As a young artist, you put your blood and guts into your work.”

A borrowed tie

At 23, Latham married a former classmate, a clothing designer. And soon — even with a half-dozen one-man shows and some success — “the responsibility light bulb went off,” he says. He began scanning the want ads. One day, he pulled his one blue blazer out of the closet, borrowed a tie and headed up to Harlem to interview at the tiny firm of Wishnow, Steinfeld & Goldstein.

The company handed Latham a directory listing every single building owner in New York City, along with his phone number, and said, “Go make money.”

He was a natural. The punishment Latham had taken trying to sell his artwork had toughened up his skin for cold calling. The stretches he’d put in on the fishing boats gave him the stamina to work long hours and the patience to wait for the hauls to come in.

Drawing from a growing directory of potential sellers and potential buyers, he began to find ways to make matches. By 1987, he’d landed a job at Cushman & Wakefield. He moved on to Eastern Consolidated as an executive director in 1991, did some time at CB Richard Ellis, then moved back to Cushman & Wakefield in 2002, where he currently serves an executive director.

Nowadays, the formerly destitute artist is one of the city’s top-paid brokers. He heads to his Rhode Island home on weekends to relax, collects Irian Jayan shields and spears, and cuts a dapper, and very businesslike, figure in his tailored navy suits.

Latham says real estate offers creative opportunities of a kind different from art that he finds deeply satisfying.

Imagination and creativity

In 2004, for instance, Latham spotted 225 Fifth Avenue, an office showroom building, and realized it would be worth much more if it were converted to high-end condos. Due to its short-term leases, it was a prime candidate.

When he called the building’s owners, the property was already in contract with an office investor. But he suggested Israeli-based Elad Properties take a look at it anyway.

“We were given 48 hours to analyze the deal, and by the time we got to 48 hours, we had signed a purchase agreement and posted a deposit,” Latham says.

Impressed by the decisiveness and confidence of Elad, Latham went back to his office and brainstormed for new ideas. At the time, tourism was slumping, and The Plaza Hotel was in dire need of renovation. Latham figured that the failure of The Two Plaza owners — Prince Al-Waleed bin Talal of Saudi Arabia and Millennium & Copthorne Hotels — to pay for upkeep might indicate tension in the partnership and imply the makings of deal. Rumors were circulating that they might sell.

So he called Singaporean hotel magnate Kwek Leng Beng, who controls Millennium & Copthorne. Within a week, Latham and Elad were in Singapore mulling terms, and then the historic $675 million sale was completed.

“If you sat in a room and said, ‘This guy is going to sell to this guy in this market,’ I would say, 90 percent [of brokers] would say, ‘That is never going to happen, it’s not worth the time to fly across the world just to see,'” Latham says.

“The main lesson is that if you have an idea you think is a good one, you have to act on it,” he says.

The deal was typical Latham, say those who know him.

“He’s always coming up with creative ideas,” says Jon Caplan, an executive vice president at Cushman & Wakefield and one of Latham’s partners. “Sometimes he’ll go off on what others might consider a tangent. And oftentimes, he turns out to be ahead of the curve.”

In addition to the ability to think out of the box, Latham’s artist background has lent him an air of unpretentiousness that clients seem to respond to.

“Scott’s extremely personable, very entertaining,” Caplan says. “His background is much more diverse than that of many people in the field. One aspect of real estate brokerage is that it’s very interpersonal, and Scott is a very engaging person to deal with.”

Jared Kushner, owner of the New York Observer, who worked closely with Latham when he purchased 666 Fifth Avenue, agrees that Latham is “very well-liked by both buyers and sellers.”

“You’re going to get a straight answer from him,” he says. “He’s very much a straight shooter, and he set a tone for professionalism throughout the transaction we did. Some people are problem makers — he’s a problem solver.”

Latham sees some similarities between the artistic process and selling real estate, but he doesn’t take the parallels too far.

“You start with a blank canvas and put objects up, there’s a dialogue between the canvas and the artist. Ideas expand; in that way the process is similar,” he says. “But I don’t think you can suggest an artist is going to be satisfied doing big deals. It’s a different kind of excitement and different kind of thrill. In real estate, it’s creativity and excitement doing larger and larger and more complex transactions.”

Over the last year, Latham has been doing more artwork in his weekend studio, returning to oil painting, sculpting and “lots of sketching.” He compares the process to “an athlete loosening up so I can get limber before finishing a marathon.”

Though Latham has no plans to retire any time soon, he is preparing to put in the kind of time necessary to create something significant.

This time, he says, “it’s different, because I don’t have to do it to try and make money anymore.”

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