LOS ANGELES—You might say that Lee & Associates has been on a carefully calibrated growth spurt. Founded in 1979 by Bill Lee as a regional industrial brokerage, the firm, which is described as the largest broker-owned commercial real estate firm in North America, now has more than 800 brokers across the US. It opened its newest office, in Minneapolis, earlier this month.
However, the expansion hasn't been strictly geographic. Under the leadership of Jeffrey Rinkov, a 21-year company veteran who became its chairman and CEO in 2014, the company has continued to broaden its reach into product categories and increase its menu of services. GlobeSt.com caught up with Rinkov earlier this week to review how the company has gotten where it has and where it's headed next.
GlobeSt.com: Lee & Associates recently was ranked second between CBRE and JLL for fastest-growing company among services firms. We have a pretty good sense of how the other firms are growing; what is driving the rate of Lee's growth?
Jeffrey Rinkov: It's a transformation that takes place over a long period of time. I believe it has everything to do with our unique structure. Internally, it's built around client services, and while many of our competitors would say the same thing, what differentiates us is that we offer an ownership model for brokers.
We believe that we're the largest broker-owned company in North America, and we attract a certain type of broker: an entrepreneurial broker, a highly productive broker, a young broker who aspires to be an entrepreneur and market leader. It's not only ownership of their book of business; it's ownership of a share of their office and an opportunity for cross-ownership in all of our expansion. What all of this means is that we're able to expand, grow our revenue and attract brokers because we're providing best-in-class client services.
GlobeSt.com: It would seem as though the attraction of proving best-in-class services and the entrepreneurial ownership model feed off of one another in creating momentum for growth.
Rinkov: Exactly right. We think all of those things line up and create momentum, they create success and they creative a hand-in-glove relationship that an office in Minneapolis will have with offices in Atlanta, New York and Southern California. We're all committed and invested in the success of every new platform and every new market that we open. It speaks to not only our external growth but to what is probably the most interesting aspect of Lee's evolution: the work we're doing internally around the expansion, formation and formalization of our specialty practice groups. How we use technology to not only tie our own organization together, but also to provide client services, is also a differentiator and helps provide momentum for us.
GlobeSt.com: Bill Lee founded the company in 1979. At what point in the evolution of the company did it start to become the sort of organization that it is today?
Rinkov: What the heart of the organization is today, I believe Bill's spirit was from day one. I talk to Bill fairly frequently, and I think the DNA is still the same; our geographic reach and product disciplinary reach is just significantly enhanced today. Bill was an entrepreneurial broker with a national firm that didn't have the opportunity to let him flourish. He went out and created his own business and built a great brand in Southern California that he made owners and founders of local offices.
We then went to Northern California and east to Arizona, and at the time we were somewhat content to be a regional industrial broker. Our Arizona office really helped catapult us into the office market and then in 2002 we took a big leap east and opened our Chicago office. That's how it has been since then; our Chicago office is multi-discipline and we are mandating that all of our expansion is multi-discipline, Having said that, I still believe that there's that DNA, that entrepreneurial spirit that Bill brought with him out of a desire to do a better job and decide how he would provide services to the clients he was so close with.
GlobeSt.com: It would seem that the evolution of Lee & Associates' specialty practices arose from that same spirit of building on the existing platform and identifying how to enhance services by taking a more granular focus.
Rinkov: Exactly, and that's the purpose of our expanding our reach from a product discipline standpoint. We started out in industrial and that's not a bad place to be strong, because it's a very stable product type and some of the largest property owners in the world participate in that space. We've segmented our industrial practice and we now have a logistics specialty practice. We have a very strong retail group with leadership out of Chicago and Southern California. We've got an office market group and a corporate solutions group that's headquartered out of New York and Atlanta. We have a multifamily group headquartered in Southern California, and we have some seniors housing business.
GlobeSt.com: In general and in specific property types, are there themes emerging in how you're advising your clients at present?
Rinkov: We're seeing greater strength across the board. We see tremendous demand for multifamily. It's the low cost of funds and Millennials who want to lease rather than own, so the pool of tenants is growing. The industry is probably a little bit slow to deliver new product in urban markets around the country, so we think multifamily has quite a bit of runway. Industrial is also strong, as we see e-commerce flourish and our ports growing in activity. Class A distribution space is attracting a tremendous amount of institutional capital on the investment and development side, and we're seeing pre-commitments from large tenants. Creative office is another area where we're seeing a lot of momentum, and in our experience, that's really limited to urban cores and as part of a mixed-use strategy.
GlobeSt.com: Where do you see additional growth and expansion for Lee?
Rinkov: Geographically, we're focused on major market openings. Minneapolis was important for us because it helps our Midwest groups strengthen even more. We're targeting a couple of pretty obvious cities in the Northwest, so you'll see us have some activity in Portland and Seattle. We're looking at Boston, Washington, DC, Miami—some of those places are going to be very important for us. And then we'll do some smaller expansion to support our major market hubs.
LOS ANGELES—You might say that Lee & Associates has been on a carefully calibrated growth spurt. Founded in 1979 by Bill Lee as a regional industrial brokerage, the firm, which is described as the largest broker-owned commercial real estate firm in North America, now has more than 800 brokers across the US. It opened its newest office, in Minneapolis, earlier this month.
However, the expansion hasn't been strictly geographic. Under the leadership of Jeffrey Rinkov, a 21-year company veteran who became its chairman and CEO in 2014, the company has continued to broaden its reach into product categories and increase its menu of services. GlobeSt.com caught up with Rinkov earlier this week to review how the company has gotten where it has and where it's headed next.
GlobeSt.com: Lee & Associates recently was ranked second between CBRE and JLL for fastest-growing company among services firms. We have a pretty good sense of how the other firms are growing; what is driving the rate of Lee's growth?
Jeffrey Rinkov: It's a transformation that takes place over a long period of time. I believe it has everything to do with our unique structure. Internally, it's built around client services, and while many of our competitors would say the same thing, what differentiates us is that we offer an ownership model for brokers.
We believe that we're the largest broker-owned company in North America, and we attract a certain type of broker: an entrepreneurial broker, a highly productive broker, a young broker who aspires to be an entrepreneur and market leader. It's not only ownership of their book of business; it's ownership of a share of their office and an opportunity for cross-ownership in all of our expansion. What all of this means is that we're able to expand, grow our revenue and attract brokers because we're providing best-in-class client services.
GlobeSt.com: It would seem as though the attraction of proving best-in-class services and the entrepreneurial ownership model feed off of one another in creating momentum for growth.
Rinkov: Exactly right. We think all of those things line up and create momentum, they create success and they creative a hand-in-glove relationship that an office in Minneapolis will have with offices in Atlanta,
GlobeSt.com: Bill Lee founded the company in 1979. At what point in the evolution of the company did it start to become the sort of organization that it is today?
Rinkov: What the heart of the organization is today, I believe Bill's spirit was from day one. I talk to Bill fairly frequently, and I think the DNA is still the same; our geographic reach and product disciplinary reach is just significantly enhanced today. Bill was an entrepreneurial broker with a national firm that didn't have the opportunity to let him flourish. He went out and created his own business and built a great brand in Southern California that he made owners and founders of local offices.
We then went to Northern California and east to Arizona, and at the time we were somewhat content to be a regional industrial broker. Our Arizona office really helped catapult us into the office market and then in 2002 we took a big leap east and opened our Chicago office. That's how it has been since then; our Chicago office is multi-discipline and we are mandating that all of our expansion is multi-discipline, Having said that, I still believe that there's that DNA, that entrepreneurial spirit that Bill brought with him out of a desire to do a better job and decide how he would provide services to the clients he was so close with.
GlobeSt.com: It would seem that the evolution of Lee & Associates' specialty practices arose from that same spirit of building on the existing platform and identifying how to enhance services by taking a more granular focus.
Rinkov: Exactly, and that's the purpose of our expanding our reach from a product discipline standpoint. We started out in industrial and that's not a bad place to be strong, because it's a very stable product type and some of the largest property owners in the world participate in that space. We've segmented our industrial practice and we now have a logistics specialty practice. We have a very strong retail group with leadership out of Chicago and Southern California. We've got an office market group and a corporate solutions group that's headquartered out of
GlobeSt.com: In general and in specific property types, are there themes emerging in how you're advising your clients at present?
Rinkov: We're seeing greater strength across the board. We see tremendous demand for multifamily. It's the low cost of funds and Millennials who want to lease rather than own, so the pool of tenants is growing. The industry is probably a little bit slow to deliver new product in urban markets around the country, so we think multifamily has quite a bit of runway. Industrial is also strong, as we see e-commerce flourish and our ports growing in activity. Class A distribution space is attracting a tremendous amount of institutional capital on the investment and development side, and we're seeing pre-commitments from large tenants. Creative office is another area where we're seeing a lot of momentum, and in our experience, that's really limited to urban cores and as part of a mixed-use strategy.
GlobeSt.com: Where do you see additional growth and expansion for Lee?
Rinkov: Geographically, we're focused on major market openings. Minneapolis was important for us because it helps our Midwest groups strengthen even more. We're targeting a couple of pretty obvious cities in the Northwest, so you'll see us have some activity in Portland and Seattle. We're looking at Boston, Washington, DC, Miami—some of those places are going to be very important for us. And then we'll do some smaller expansion to support our major market hubs.
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