ORANGE COUNTY, CA—Lee & Associates has been busy this year opening offices in locations across the country; GlobeSt.com recently reported on the firm's office openings in Cleveland and Denver. Yet the brokerage firm is also continually ranked among the top five brokerages in Orange County, where it was born in 1979. We sat down for a chat with Lee's three Orange County-office presidents—John Hall from Irvine, Bob Sattler from Orange and Steve Jehorek from Newport Beach—to discuss how the firm maintains its cohesiveness through all this growth, what a broker-owned and –managed firm does for the CRE industry and how Orange County commercial real estate has changed over the years.

GlobeSt.com: How does Lee maintain cohesiveness with so many brokers in so many markets?

Hall: Many of the disciplines like the retail, office and industrial groups have quarterly conference calls where they talk about their marketplaces and what they're doing. We also have an annual company summit in Las Vegas for all the brokers, with two days' worth of workshops, networking and speeches. Also, if someone is working on something, we will put out an email to everyone across the country so people can respond. We get emails from the corporate side, but we also get emails from the individual offices all the time. We talk to the other presidents about who their best guy is for a particular assignment.

Jehorek: There's a lot of referral business that goes on between offices.

Sattler: Compared with a lot of the other major firms, we're pretty small, and there's an intimate feeling across the country.

GlobeSt.com: What does the fact that the firm is owned and managed by its brokers mean for the commercial real estate industry?

Jehorek: The industry benefits because we have more of an ownership role. We're primarily made up of individual brokers, so we're made up of different companies that each take ownership and handle their own management. That's the main benefit.

Sattler: Because of our ownership role, there is stability. There's not a lot of revolving to other companies. We just don't have that. We rarely see anybody leave for reasons other than retirement.

Hall: In our office, if you took an average, from the guy who's only been there a year to the guy who's been there 30 years, we average 16 years in the business.

Jehorek: We're typically known as an experienced broker house.

GlobeSt.com: What is the most significant thing our readers should know about Lee & Associates' relationship with Orange County?

Jehorek: We have lots of experience and a depth of brokers.

Sattler: That experience goes quite deep. I came from CBRE 17 years ago after 15 years there. That's how this firm keeps growing. The experienced agents want ownership. They want to have a stronger position, and they come to Lee.

If we go back in history 20 to 30 years, most major firms had three offices or at least two. Because of their pressure to maintain numbers for corporate profits for their stock, they have consolidated to be more efficient. We started out as independent offices, so we didn't have that pressure. We're independent companies, so we are still able to service because we're located closer to our markets, which is different from other firms.

Hall: CBRE consolidated, and they have something like 120 brokers in one office. That's close to what we have in three offices. We don't look at it as an oversaturation of the market. We do between 400 and 500 transactions a year, and we don't step on each other's toes that much.

Jehorek: We co-broker many opportunities.

Sattler: And we three presidents get together for lunch regularly to see what's happening. We have a good relationship in Orange County. 

GlobeSt.com: What are the most pressing issues you face as brokers in Orange County?

Sattler: The first thing that comes to mind is the lack of developable land. When I first started, we still had room for development, but that's basically gone. The second thing, in Irvine especially, is the conversion of commercial property into residential.

Hall: I would say the same thing. When I first got into the business, in South Orange County there was a lot of land. The majority of transactions we did were with developers. They would put product up and we would lease it out. That dynamic has changed for two reasons: 1. the economy; and 2. there's not that much available land. Those things are obviously switching up a little. Some more land is becoming available on military bases, and Rancho Mission Viejo, they took a lot of their industrial out of the equation, but the dynamics have changed. Our number-one clients are no longer developers.

GlobeSt.com: Has there been a shift from industrial to office in Orange County, or has that ratio remained the same for you?

Sattler: North County has stayed industrial.

Jehorek: There have been some conversions to more office and R&D in the Newport Beach region.

Hall: In South County, we went into small industrial development and converted to R&D. Industrial has gone toward office or light assembly. We don't have a lot of heavy manufacturing or industrial M-1-type properties in South Orange County.

Jehorek: There's more big distribution out in the Inland Empire or Los Angeles.

GlobeSt.com: How will the firm continue to grow in this region, especially as other offices are added nationwide?

Jehorek: Growth in other markets gives our brokers more people to go to for help.

Hall: That's one of the things we bring to our clients, and most brokers across the land do, too—we bring our Rolodex, our contacts. That's actually huge. We can go to them to ask questions like, “Can you come up with a sound engineer?” You don't just go look up that guy in the Yellow Pages. If I need a lawyer in Atlanta, I can actually call the guy in Atlanta and get two referrals—that president in Atlanta already has that guy and can give me the names and numbers. That happens more often than you would believe.

Jehorek: All the presidents from all the offices get together every quarter and basically help each other and improve on our common knowledge.

GlobeSt.com: How has technology changed the way you do business?

Jehorek: The information is more readily available.

Hall: Because there's so much more available information out there you can get on the Internet for free, you have to take it another step further and really become an expert in your area. You can't really find out where the market is going from the Internet. Our brokers can show trends and point out the deciding factor on whether to make a particular deal or not. By the time it hits the newspaper it's six months old, but because we have boots on the ground, we know sooner. Technology plays a role in that. In transactions, it's boom-boom-boom and the whole thing is packaged and Dropboxed overnight, as opposed to 20 years ago when there were fax machines and messengers.

Sattler: Before the advent of technology, we were providing information on what properties were available. Today, we get calls from tenants who have found a property online, but they don't have the market expertise or knowledge to make a decision on it, and that's where we come into play more than in the past.