The situation is a familiar one from the past year: 2020 changed a banner year full of promise into a difficult scenario full of fear and challenges. Jeffrey Rinkov, CEO and chairman of the board at Lee & Associates reflects on how his company took an emphasis on technology and communications infrastructure and used the past year as a time for reflection and a period to promote growth and client engagement. He also discussed trends he’s seeing for the future, the lessons he’s learned from a most unusual year and why he’s feeling optimistic for 2021.
Focusing on Clients from the Start
It’s hard to believe that less than one year ago, Rinkov’s team was experiencing an industry-wide high of momentum with massive pipelines and robust capital.
What happened when the unthinkable came to pass? Rinkov explains that the executive leadership team at Lee & Associates took a moment in the early chaos to pause and evaluate what was critical, “Employee and agent safety, client connectivity and how we could deploy resources throughout our platform in a completely different way to support our agents and their client pursuits and interactions.”
Tech savvy, hours of leadership phone calls and ingrained communication practices laid the path for pivoting. The formula for Lee & Associates’ success since then has been wide ranging and positive: among the results were expanding the company’s research voice and engaging in a virtual Lee Summit annual meeting. Plus, Rinkov explains, “We started giving our agents reasons to be in contact with their clients and become a more valued resource through the content that we were producing. We showed the depths of our brand and our skillset, along with tasks that we could assist in, advising in areas that weren’t only transaction-based when we couldn’t make a transaction.”
Compassion and hard work have brought together individuals at Lee & Associates as a company and allowed them to move forward with empathy and grace as a client-forward business. The challenges of client connectivity required a company attitude that supported safe and tactful interactions. Says Rinkov, “I think that the client interaction was certainly the most sensitive consideration, because we hold our clients in such great esteem. We consider our client obligations and interactions at the highest level of importance, because they are so precious. We let our clients lead the discussion.”
That decision to focus on client needs from the beginning of the shutdown meant that Lee & Associates saw clients come to them with their needs: Data, the need to start business in the new normal, capital to be deployed, additional tenants, aggressively marketed spaces. Clients needing a robust and creative approach to a problem — be it pricing or tenant inducements or transaction volume —found their answer with Lee & Associates. There was even some increased velocity in these conversations, as discussions were no longer tethered to in-person meetings. Rinkov says the company also invested heavily in accelerating and improving how its employees explained their goals and abilities to clients, an approach brokers were quick to adopt.
Lee & Associates was focused on clients and technology long before the pandemic began, so the re-emphasis brought by the pandemic found a natural home. “There’s so much value in the free flow of data,” Rinkov says. “We have an internal data aggregation project that we’ve been implementing during the last half of 2020. We’re really focused on the continued use and adoption of technology, and we monitor that space extremely closely. I think we’re in a position where we can make some very intelligent, incremental investments, to the benefit of the company and the agents.” Again, Rinkov explains, the priority remains helping their clients make really good, data-driven decisions.
CRE Trends Moving Forward
Some of the most dramatic COVID-19-related changes have been “not so much changes, but accelerations,” says Rinkov. “Retail has been a product discipline that’s been in transition. The industry is trying to understand what ‘omnichannel’ means and to create a brick-and-mortar presence that supports an e-commerce portal. It’s been challenging, and it has led to more vacancy and differing types of engagement. People are trying to identify how consumers are best served.”
Rinkov points out that the “acceleration and the thrust towards e-commerce (and how it has affected industrial real estate and last-mile facilities) has been dramatic” and has given an upward lift to industrial real estate.
Still, while e-commerce shopping is clearly here to stay because it’s efficient for the customer, Rinkov explains “I do think there is an opportunity for Main Street and High Street retail that can either differentiate itself or be paired well with e-commerce.” He also believes that as the market changes and people are more comfortable returning to their old ways once there is widespread availability of vaccines, that experiential retail and real estate will once again grow in importance.
Cultivating Office Culture
Will the emphasis on working from home stick? Rinkov jokes that yes, as a broker who spent most of his lunches sitting in his car with a sandwich in one hand and a cell phone in the other, he thinks remote work will stay a big part of real estate brokerage.
How we occupy offices, fitness centers or medical offices will certainly change: people will return to physically occupy these spaces, but there will be a demand for “changes in density interaction. There will be the need for more efficiency, smaller commutes or fewer commutes per week,” he says.
Suburban offices will certainly benefit from ongoing changes. Previously overlooked, this suddenly re-energized product type has gained popularity as more companies have decentralized their offices — providing places where smaller groups of people can have all the resources, they need in one place and collaborate, while others work from home.
Rinkov believes that more people will want to seek their peers and colleagues out as time goes on, since “it’s really challenging to deliver culture through a Zoom call or through a webinar or a virtual platform.” Annual meetings and the need for in-person client interactions may drive interactions in a more densely populated environment. Although people have grown used to working from home, the benefits of company culture may quickly draw them back into physical spaces as it becomes safer to do so.
Expanding Operations and Looking to the Future
Lee & Associates continued its growth in 2020, adding offices to serve expanding markets. The company opened three East Coast offices in key markets: Boston, Washington, D.C. and Naples, Fla. “We’ve had a tremendous volume of business that has been flowing from within our company into those markets. Our capital was raised in advance of [our] expansion activities, and it was raised specifically for a targeted list of expansion cities where we want to have a physical presence.”
But it isn’t just the locations that Rinkov is proud of; it’s the people. “We are really careful about who we choose as partners. We’re definitely looking for entrepreneurial self-starting brokers who want to enjoy the benefit of an international brokerage firm with lots of resources in a number of markets.” Carefully selected people, local ownership and a unique structure for raising and deploying capital has allowed Lee & Associates to expand with confidence.
Rinkov’s outlook for 2021 is cautiously optimistic: “I think we are seeing those green shoots of pent-up demand. I think you’re seeing it in shopping patterns, and I think you’re seeing it in the way that real estate owners and occupants are acting. In many levels of the economy, demand is ready to come back, and it’s going to be very robust. When we can get to, maybe, that May-June period, I think you’re going to see a wave, a tsunami of demand and economic activity and growth. That is really going to be tremendous. I would say it’s going to be a little bit of a tough landing into the first quarter. And then I think the economy really starts to show new signs of life will outpace projected growth in the back half of the year.”