SEATTLE—As 2016 winds down, Los Angeles-based Lee & Associates has branched out into another key market: Seattle, gateway to the Pacific Northwest region that is among the strongest economic markets in the US. What's known as Northwest Lee & Associates is headed by industry veteran Jim Bowles in partnership with longtime brokerage leader Richard Peterson and Chris Peterson. It's the ninth Lee office to open in the past two years, preceded by Walnut Creek, CA; Minneapolis; Pasadena, CA; Vancouver, B.C.; Eastern Pennsylvania; Cleveland and Columbus, OH; and Houston.
CEO Jeffrey Rinkov tells GlobeSt.com that Seattle—an expansion announced just before the Christmas break—can serve as a model for the additional expansion his firm is planning over the next two to two-and-a-half years. He also sees continuing opportunities for Lee & Associates' clients, not only via established offices but also in markets where the firm has strong activity but hasn't yet established a physical presence.
GlobeSt.com: When looking at markets to expand into, what made Seattle seem like the best fit at the moment?
Jeffrey Rinkov: Seattle was an important market for a number of reasons, predominantly because it's a place where have a flow of business both in and out. At the top of our service platform is our ability to respond to client requirements, so Seattle was a place where we needed to be with a very strong team. For a number of years, we have desired to be in Seattle, and we have now actually found that team that can execute on our platform and was attracted to our model. That includes service, equity in the firm and ownership, and autonomy supported by a national brand. There's also our continued interest in expansion, and Seattle was a logical place. We've identified 12 to 15 large US cities where we don't currently have a presence and are aggressively looking at pursuing expansion.
GlobeSt.com: Do these markets each have unique characteristics, or are there common themes among them?
Rinkov: We view Seattle as kind of a standard. If you take a look at the dynamic and the strong fundamentals there, that's a great example of what we're looking for in a market. They have diversity of product type, incredible energy as far as demand from tenants and buyers is concerned and capital flowing into the market. We're looking for those types of dynamics, with strong construction demand and activity and a stronger economic base in a larger metropolitan area.
GlobeSt.com: Looking into 2017, are you operating on a specific timetable for rolling out the platform in some of these larger markets?
Rinkov: The timetable is likely an accelerated one, even though we're extremely pleased with the expansion activity and the successes we've achieved in the offices we've opened over the past two or three years. Where we've increased our resources in our service platform—our ability to service clients and service agents across the country and grow that count. We're hoping that the next 24 to 30 months is the timeframe in which we achieve success in those 12 to 15 markets, in the US and in Canada.
In terms of desire to accelerate expansion, we have brought on Joe Vargas, who's a former president of the West for Cushman & Wakefield. He played a sizable role in helping us identify our Seattle leaders from his prior relationships at Cushman & Wakefield. Joe continues to work on our behalf on expansion across the country. We think it's very important to have a high-profile talent with a long history who's out there sourcing opportunities and identifying partners for us.
GlobeSt.com: For next year, where do you see the most compelling growth opportunities for Lee & Associates and for your clients?
Rinkov: At Lee & Associates, our very strong focus will be on the Northeast and the Midwest for continued expansion. We also think those are great places for where our clients are executing opportunities and where we're able to execute opportunities for them. Places where we don't have locations currently—Boston, Washington, DC, Charlotte, Miami—but we do have tremendous client activity are some of the target cities. They're large MSAs that speak to everything we like from the standpoint of demand, capital and strong brokerage talent.
From the standpoint of where we see opportunities generally for our clients, we have a very long history in the industrial market. I think that will continue to be the least sexy of the product types but probably the most stable. There's a lot of growth there, and we don't think we run the risk of overdevelopment, as we've seen in other cycles. The current pace of development has been very responsible. We continue to see great opportunities in multifamily; mixed-use in urban areas is a great opportunity for client investment. Retail in general, along with office, is in somewhat of a state of transition, but some of that inefficiency, along with the transitory nature of those markets, creates opportunity for our investor clients.
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