Sunday, July 11, 2010

Lee and Associates

My Company, Lee and Associates Commercial Real Estate Services, Orange, California

Brief History:
Bill Lee, the founder of Lee and Associates, was a top producer at Grubb and Ellis in the 1970's. Bill's observation was that there was no intra office cooperation even though there was one agent in the office with a 30,000 square foot listing and another agent within the office with a 30,000 square foot buyer. An agent within the Grubb and Ellis office had zero incentive to cooperate with his fellow Grubb and Ellis agent...quite the contrary, in many cases the Grubb and Ellis agent would "pocket" the information so that he could "double end" the deal with his own buyer. Bill wondered if there was a way to create intra office cooperation through a sharing of commissions and profit.

The Birth of Lee and Associates:
Bill Lee and four of his Grubb and Ellis friends started Lee and Associates in 1979. The theory was simple but revolutionary; create a system that would reward profitability and encourage cooperation. Each of the original "partners" was free to broker in any area, call upon any client they chose (as long as another Lee agent didn't have an existing relationship) and the agents were encouraged to cooperate with each other. Profit was divided at the end of the year and apportioned to each partner according to his contribution to the profit. The resulting "splits" exceeded anything in the industry then and now. Lee and Associates "principals" (as we are now called) enjoy the best splits in the industry.

Catching the Wave:
Bill realized that in order for the firm to grow, he must expand geographically. Bill took the same concept and "sold" the concept to other agents in Southern California. The Anaheim (Orange office) was formed in 1983, Newport soon followed in 1984. The company achieved exponential growth in the next seven years as Ontario, Riverside, South Bay, City of Industry and Commerce, North San Diego County, Phoenix, West Los Angeles, and the San Fernando Valley offices were formed. The growth was made possible because of the "venture investment" structure that Bill created. Each principal was allowed to invest in the new offices as they were formed. The investment created the seed money to allow the new office to operate until it became profitable. A small percentage of the commission volume was used to pay a "return" on the venture investment. Now in addition to an incentive to share profits intra office, there was an incentive to share business inter office.

Present Value:
Lee and Associates is currently the fourth largest national commercial real estate company. We have 40 offices nationally and approximately 450 agents. Bill's vision has revolutionized the way in which brokerage is practiced.

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