Bill Lee: A Tribute to a Commercial Real Estate Brokerage Icon
Over the years, very little has been done on a large scale to transform the lives and the income of commercial real estate brokers. But in 1979, Bill Lee had a vision, and he asked himself the following kinds of questions:
- Since brokers are the ones generating all of the income for commercial real estate brokerage companies, why should they be giving away so much of their money to the company and to outside shareholders?
- Why is it that brokers need to be paying for big salaries and for the overhead of executives located in smoked-glass office towers hundreds or even thousands of miles away, when the brokers can’t quite understand what these people are even doing to help them to make more money?
- Can we develop a commercial real estate brokerage company with a prominent national presence, where the profits would go directly back into the pockets of the brokers themselves, and the management and the running of the day-to-day operations of the business would take place 100% at the local level of the individual brokerage office, without needing to follow the mandates of executives who are often located many miles away?
With this in mind, Bill Lee moved forward with his vision, he created the Lee & Associates brand, and the resulting growth of his vision has been quite astounding. His company now has more than 60 offices and 1,000 brokers, and the top brokers within each office can enjoy retaining as much as 85-89% of their gross commissions within their own pockets, depending upon the individual office, the broker’s amount of production, and on how profitable that individual office has become.
In addition, the top brokers within each office then become the shareholders of that office, and they determine how that office will be both managed and run, without any outside influence.
Compare this instead with major brokerage companies that are dealing with the pressure of outside shareholders, and the demand to cut expenses in order to meet both quarterly and annual projected returns. But with Lee & Associates offices, they’re already running lean and mean, without paying any massive outside executive salaries, and the brokers themselves know exactly what expenses are necessary for them to undertake within any economy, in order for them to maximize their production.
In addition, when it comes time to expand and open new offices, the company turns to its own agents from within, and offers them the opportunity to invest in these new offices, once again keeping the money and the profitability where it belongs…in the hands of the brokers who are working hard, rolling up their sleeves every day, and producing the money.
I was the President and manager of one of the Lee & Associates offices in the L.A. area in the 1990s, so I have firsthand experience of how this company has been run.
In addition to this, when I talk to brokers with the large commercial real estate brokerage companies, there is oftentimes the feeling that they’re not being appreciated as much as they should be by upper management. These brokers are paying the big salaries of these company executives, but there doesn’t seem to be much communication of gratitude going back to the brokers. So when this is going on, combined with the opportunity to pocket a far greater amount of their gross commissions by joining another nationally-known company, this is one factor that has definitely contributed to the strong growth of the Lee & Associates brand.
So I salute Bill Lee for having the vision, and for creating an environment where brokers can keep a much larger percentage of the commissions that they’re bringing into the company, have complete autonomy in running their own offices at the local level, and enjoy a national brand behind them that continues to grow the number of brokers and offices that it has under its own umbrella, every single year.