“Coming To The West Coast Ready to Make a Deal”

James Flanigan via The New York Times

October 20, 2005

DAVID LEE passed a small milestone this month when he closed a deal to buy three office buildings in the Airport Center complex near Los Angeles International Airport for $70 million.

By coincidence, the purchase brought to 70 the number of office buildings he has acquired for Jamison Properties, the real estate investment and management company he started 10 years ago to make tax-deferred investments for himself and eight other Korean immigrant doctors and dentists.

Today Jamison, which also owns 13 medical office buildings and 6 shopping centers, buys and manages real estate for 100 investors -- "90 percent of them Korean," Mr. Lee said. The company controls 20 million square feet of space worth $3 billion, making Jamison the largest owner of commercial property in Los Angeles County and Mr. Lee the most notable exemplar of Southern California's growing and furiously entrepreneurial Korean community.

Yet Mr. Lee, who came to the United States from Seoul, South Korea, 34 years ago at age 17 and trained in internal medicine at Northwestern University Medical School, is relatively little known outside his ethnic and professional circles. A modest, quiet-spoken man, he is no Donald Trump.

That is not necessarily a disadvantage. "He is under the radar," said John Cushman, chairman of Cushman & Wakefield, the real estate company. "And that's a good place to be. It allows him to buy property at low prices."

Bargain hunting is an art the doctor has practiced since buying his first office building on Wilshire Boulevard in 1995. Los Angeles was under a cloud at the time in the aftermath of riots in 1992, brush fires in 1993 and an earthquake in 1994. Insurance companies were selling half-empty buildings at knockdown prices, seeing no way the economy would revive.

But David Lee knew that a hidden market existed among Korean immigrant entrepreneurs, many of them recent arrivals who had been forced into early retirement in corporate restructurings back home. Lacking a credit rating in America but rich with severance and retirement bonuses, they had cash to pay the rent for office space for businesses to serve the city's fast-growing Korean population, which is pushing 300,000 today, up from 190,000 in 1990.

Coming to the United States as adults, often nearing middle age and with few English-language skills, these newcomers have become renowned for a hard-charging desire to own businesses. And some see deeper historical roots to the phenomenon. "Koreans are like many people who were poor and colonized for centuries; they want to prove something to themselves and to others," said Charles Rim, a Korean-born, U.C.L.A.-educated accountant who has recently been investing in land for residential development in Ventura and Santa Barbara Counties.

Today, that first building that Mr. Lee bought 10 years ago is worth five times the $6 million he paid for it. And he has repeated that process many times since, promising investors a 15 percent annual return and achieving it partly by cutting maintenance costs but mostly by sitting back and watching commercial property prices boom along with the Southern California economy.

He still has a nose for deals, like snapping up Airport Center for a price per square foot that is 20 percent to 50 percent below the going rate for good office space in Los Angeles. "The airport area is the weakest market because politicians can't decide how they're going to change or expand LAX," he said. But he has time to wait for such matters to sort themselves out. "We invest on a six-to-seven-year cycle," Mr. Lee said, "where most investors are on a three-to-five-year cycle."

He also knows when to bide his time. Aside from Airport Center, Jamison Properties is not buying much these days because prices are approaching replacement value for buildings and, he says, "I like to buy below replacement value."

What to do with investors' money? Mr. Lee says he is collaborating with eight other people to start a bank next spring called the Premier Business Bank that will cater "to wealthy professionals, doctors, lawyers and businesspeople who need personal financial services."

That will put him in good company. Four fast-growing Korean banking companies in Los Angeles -- the Center Financial Corporation, the Hanmi Financial Corporation, Nara Bancorp and Wilshire Bancorp -- have assets of $8 billion. They are thriving in part by supplying credit to the hundreds of Korean-owned garment companies and other businesses that are "inspired by Mr. Lee's success and buying the real estate in the downtown garment district," according to Jack Kyser, an economist at the Los Angeles County Economic Development Corporation.

Some Korean-owned enterprises are becoming prominent on a wider stage. One Korean immigrant, Don Chang, for example, has built Forever 21 Inc., based in Los Angeles, into a successful national chain of clothing stores for teenage girls. The Korean-born Sabrina Kay built her California Design College into a successful business in the 1990's teaching computerized design and pattern-making to young people seeking jobs in the garment industry. Ms. Kay, 40, sold the college in 2002 to the Education Management Corporation in Pittsburgh for about $15 million, and she has now started Fremont Private Investments Inc., a venture-capital firm for start-ups.

She has some ideas for new companies. "One is for a gallery featuring modern Asian art, from China and Korea," she said

She is also looking to back a new kind of trans-Pacific company that brings together manufacturing in China or South Korea with fashion design in Los Angeles. And she wants to start a financial-services firm catering to entrepreneurs in Southern California's ethnic communities.

Ms. Kay is a co-founder with Mr. Lee of the Premier Business Bank but they are the only Korean partners in the bank. "Business here in Southern California is multicultural," Mr. Lee said.

For future growth, "Korean businesses will need access to institutional capital markets and major corporate relationships," says Stewart Kim, a former managing director of Merrill Lynch in New York, who founded an investment banking firm, PGP Capital Advisors, in Los Angeles in 1995.

Mr. Kim, a graduate of Dartmouth and the Wharton School of the University of Pennsylvania, sees relationships increasing between American and South Korean companies. PGP Capital helped arrange a wireless communication joint venture this year between Earthlink, the Atlanta Internet service provider, and SK Telecom of Seoul, a cellular telecommunications company, for example.

With a daughter and two sons at the University of Southern California and another son in high school, Mr. Lee, 51, is thinking ahead. Will his children be joining him in the business? "If they like money, they will be," he responds with a smile. "If they don't like money, they will be nonprofit."

He worries, though, whether the entrepreneurial spirit will be diluted over future generations. He cites a Korean saying that the first generation makes the money, the second generation spends it and the third is back where the first started. Not having seen the Kennedy name on magazine lists of the superrich, he wonders: "What about the Kennedys? Did that family stay rich after Joseph Kennedy?"

And so Mr. Lee and many in the Korean entrepreneurial community are moving from a traditional Korean story and becoming an American one.

This column about small-business trends in California and the West appears on the third Thursday of every month.