Robert Lee: the Vancouver Real Estate Businessman Who Loves to Give Back
Thename Robert H. Lee is visible throughout the City of Vancouver. There is the Robert Lee YMCA in downtown, the Robert and Lily Lee Family Community Health Centre near the corner of Commercial Drive and Broadway Avenue in East Vancouver, and the Robert H. Lee Graduate School at the University of British Columbia’s Sauder School of Business. The ubiquitous Vancouver businessman was also awarded the Order of British Columbia in 1990, the Order of Canada in 1999 and the Ernst & Young Pacific Lifetime Achievement Award in 2008. In November 2016, I visited Lee at the downtown office of his real estate company, Prospero International Realty Inc. Born and raised in Vancouver to Chinese immigrants, Lee took a stroll down memory lane and recounted his successes in real estate as well as the lessons he learned along the way.
CAIFU: How did you get into the real estate industry?
Lee: My father was in the importing business. His side business was real estate. So when I was around 12 or 13, I was working for my father and he dealt with a lot of real estate agents. In the late 1950s, when I graduated from school, I ran one of his companies. We became the number one bamboo-blind importer in Canada. I was making money but it wasn’t exciting to me. So I told my Dad, ‘I want to go into the real estate business as a salesman.’ Not many university graduates want to be a salesman for real estate; most of them want to be executives for big companies. I went into real estate in 1959. I have been in the business for over 50 years.
CAIFU: What is it about real estate that interested you?
Lee: It’s global! It’s huge! The sky’s the limit of what you can do. Naturally, I was dreaming I can sell some of the big buildings in Vancouver. I struggled for two to three years. In the third year, people in Hong Kong were worried China will take over Hong Kong. Many wealthy Chinese people immigrated to Vancouver and Toronto. At the time, I was the only person in commercial real estate who spoke Chinese, so I had a monopoly on all the Chinese buyers. One of them wanted to buy an apartment building. Being new to the game -- only three years -- I suggested buildings with around 20 suites. We drove around the city and he said, ‘I’d like to buy that one.’ It was the biggest one in the West end, called the Imperial Towers, with 263 units. I concluded that sale and made 10 times my annual salary in one deal. When I showed my dad the cheque, he said, ‘I think you’re in the right business.’ Once I sold that big building, people phoned me instead.
CAIFU: Is that when you started Prospero?
Lee: At that time, I was working for this big company, H.A. Roberts, that has exclusivity with the British Properties so there was no reason for me to move. A friend of mine, Peter Wall --
who I purchased a building from -- asked me to be a third partner in a real estate investment and development company. Together we founded the Wall Financial Corporation. This was in the 1966. Then I wanted to build up my own company for my children, so I left and I started Prospero in 1979. Today, I am still a shareholder and a director of Wall Financial.
CAIFU: What is your outlook for commercial and residential real estate in Vancouver?
Lee: Vancouver is surrounded by water, so growth can only be out toward the valley. The single dwelling home values are still going to go up. Overall, residential home prices are still going to increase in the long run. Even though the city imposed the 15 percent foreigner- buyers tax, this means little to people from China. Also, the exchange rate [from renminbi to Canadian] is at a 25 percent discount at the moment. I know volume is down quite a bit right now, but the price is pretty stable and I don’t think home prices will come down much more than a few years ago. It went up and came down a bit, but it’s not going to go way down.
Commercial-wise, there are very low yields here compared to the rest of North America. The yield is about two to three percent for residential properties and four to six percent for commercial properties. There will still be buyers though because the land is valuable. So, overall, commercial is still good here.
CAIFU: What is your management philosophy for building a company?
Lee: I started UBC Properties Trust in 1988. It was a struggle because UBC did not want to cut trees down. I was 52 years old when I volunteered on the board of governors. I was the only real estate expert there. It took me more than two years to convince the board to form a UBC Properties Trust to develop the university land. Finally, the board granted me a small site of 28 acres as a pilot project that eventually created $81 million.
I leased the land for 99 years instead of freehold. When Hampton Place came on the market, none of the local developers put in a bid because they wanted to buy freehold. So I figured out who is used to leasehold: people from Hong Kong and London. I phoned my good friend George Tso, a Hong Kong construction company. I told him I wanted $8 million to build some condos on the campus. They came over and started building. Halfway through construction, everything was sold. That was a defining moment to me because in 99 years, UBC will receive another huge cheque.
I picked six directors who were all experts in the real estate business: tax, appraisals, residential and commercial development. We raised $ 1.3 billion to date. We only developed two-thirds of the site so we should reach over $2 billion. If the market keeps on going up, we’re going to make $3 billion. An interest rate of three or four percent at $3 billion is a lot of discretionary money for the university president.
My management philosophy for building a company is to pick the right people; pick the best in the business and know the right people from networking and maintaining relationships.
CAIFU: Why is it important for you to give back to the community?
Lee: I am following in my Dad’s footsteps. He was very active in Chinatown with the YWCA, Chinese public school, the Merchant’s Association and the Lions Club. Growing up and seeing what my Dad did, I thought I should do the same. When I was 50 years old, I was quite comfortable financially. That is why I joined the board at UBC. I was hoping maybe after three years I will go back to business, but I’ve been there for 30 years. I think the UBC Properties Trust, with the amount of money that we were going to raise from real estate, will help the future generations of Vancouver tremendously.
A lot of people are successful businessmen, but a lot of people don’t give time and money to the community. Earning money is not hard if you know how to do it. But to give it away is difficult. Also, a lot of people give money, but when you have an idea you have to carry it through. If you just give the money and let someone else carry out the vision, it never works. I spent 30 years at UBC. I retired as Chairman only two years ago.
CAIFU: What are your current philanthropic projects?
Lee: I want to focus on education and health. That is why I was involved with the general hospital and built the Robert and Lily Lee community health centre. My daughter has been planning to build a 40,000- square- foot health centre, like the existing one, in the east end of Vancouver. After three years of negotiation, it looks like it will be built. The Vancouver mayor made the announcement earlier this year.
CAIFU: What is your best advice for someone who wants to start a real estate company?
Lee: Never be afraid of anything. There is nothing wrong with thinking big, provided you have a strategy. Also, follow successful people. In the beginning, when I sold real estate to a wealthy person, I asked if I can participate and put 10 percent down. Most of them said yes. In the early stages, I hung on their coattails until I could be on my own. And that’s relationship, because they would not invite you in if they didn’t like you.