Ed Indvik, managing director of Los Angeles-based Lee & Associates, said he intends to grow his brokerage from 39 offices around the country to 100 within the next few years.
Indvik, in San Diego for the Society of Office & Industrial Realtors annual spring conference at the Manchester Grand Hyatt last week, said the Sorrento Mesa and Carlsbad Lee brokerages are bursting at the seams and will soon need to add more offices.
It is currently being evaluated just where those offices will be located and how many more will be needed.
"We don't have any empty desks," Indvik said.
Company-wide, Lee & Associates currently has about 600 brokers plus roughly 200 support staff.
Indvik recalled that there were only about 100 brokers company-wide in 1989 around the time he joined the firm.
Indvik has more than 30 years in commercial real estate, has handled more than 2,500 transactions and oversaw development deals involving more than 7.5 million square feet of commercial space.
"I've also handled more than 100 bankruptcy dispositions," Indvik said.
While Lee & Associates saw its sales and leasing volume decline by about 25 percent between 2007 and 2008, the firm has been able to more than make up the difference by keeping its overhead low. James Munson, a Lee & Associates principal who oversees the San Diego offices, said the difference in overhead is dramatically difference as $40,000 per desk for Lee & Associates, versus about $150,000 per desk for a big commercial brokerage that may be publicly traded.
Indvik said this is a winning formula.
"Our profit margins are much greater, especially when there is a downturn," Indvik said, adding that his brokers can keep more of those profits than traditional brokerages.
Unlike many brokerage firms, each of the brokers at Lee have an ownership stake in the company, and profits are distributed at the office level.
The firm also tends to steer away from trophy space and also occupies less expensive space.
Indvik, who continues to work as a broker in spite of his title, has been busy recruiting lately. Munson came from Cushman & Wakefield a few months ago. Mark Larson, formerly of CB Richard Ellis (NYSE: CBG) and Grubb & Ellis, (NYSE: GBE) joined in February, and Patrick Benton, formerly of Countrywide Financial, came on board recently as well.
Steve Peters, a capital markets expert is also a new addition to the team.
"We also have Phil Royster who opened 55 offices for Grubb," Indvik added. "He will help drive this growth."
Lee & Associates may be adding people here, and low overhead may be keeping the firm busy, but Indvik doesn't pretend these times are easy.
"We as an industry have to go through a de-leveraging process that's quite painful. It wouldn't surprise me if it continued like this for a year or more," Indvik said.
That said, Indvik believes that with a statewide population projected to climb from about 35 million to some 55 million within the next 20 years, most as a result of births over deaths, the commercial markets will be poised for long-term growth a couple of years from now.
He also believes that all the more than 1,000 automobile dealerships that General Motors (NYSE: GM) plans to close across the country will see some significant and perhaps inventive reuse.
"These tend to be among the more attractive infill locations that are along highly traveled corridors. The corridors where these dealerships are located follow rooftops and tend to have very good traffic counts," Indvik said.
Indvik said along with a rebound in the housing market, technology and its promise, will lead the economy out of recession and fill space that now goes begging.
"Look at this," Indvik said, holding up an iPhone. "Could you have even imagined this a decade ago? There will be faster computers and other advances that we don't know about yet. There are growth industries out there. You just have to find them."