Joe Segal recalls the early years

Time had run out, but nobody was in a hurry to leave.
Legendary retailer, real estate investor and philanthropist Joe Segal was told stories about his life in business during this month's NAIOP Vancouver breakfast, and many wished later that they could have stayed to hear more. (For proof, check out the tweets on Twitter).
It's not a well known fact, but Segal was once a commercial real estate broker.

I'll be blogging Segal's answers to questions in the Q and A session. Since we're in blog mode, I'll keep things in point form.

In this segment, he talks about his early years on business.

1. On starting out with $1,000.

“I had no money. Well, I had $1,000 . . . That was 21/2 years of deficit spending at $1.30 a day. That’s a buck nowadays . . . I always got, incidentally, what no one else wanted. So I had to become aware of what I was going to do with it before I bought it because I couldn’t make any mistakes. The medical supplies package was actually worth . . . a million dollars. I think I paid $7,000 for it, because nobody else knew what to do with it. When you buy these packages of medical equipment, if you have no idea what a cranium drill is . . . how do you sell it? . . . I put an ad in the paper and I said: Attention, hospitals, doctors. Wherever there’s medical equipment. New, a third off, and used 50 per cent off . . . So you had to know what you were going to do with the value . . . War surplus paint. Olive drab paint. I can remember buying 2,000 gallons for 25 cents a gallon . . . I rented a truck. I loaded the truck. I thought: What am I going to do with it. Nobody’s going to paint their house camouflage. Olive drab? So I loaded I loaded this all in a green . . . Ford truck. I’d load it in the morning and I would head for Ladner. The next day, I would load it again and I would go to Chilliwack, it all in it isn’t what it’s worth. It’s what you do with it that really counts. I had every barn in the Lower Mainland painted olive drab. So it isn’t what’s it’s worth. It’s what you do with it that really counts.”

2. On life as a commercial real estate broker.

“I was not kidding. I was a broker, but I couldn’t make a living at it, because I was selling coffee shops, corner grocery stores. In those days, the commission was 10 per cent, and I sold many coffee shops and many grocery stores. The average price was $50,000-$I00,000 and $60,000-$80,000 and I was doing pretty well and I had two partners . . . I would go out and I would (get) the profits, the commissions, and then I would come back and we would have a crap game at the back of the office, and I would lose all my money. They were getting the margin! So I didn’t stay in the brokerage business.”

3. On making his first major commercial real estate purchase for $100,000 after ending his career as a broker.

“That was at the time that the Vancouver Sun and the Vancouver Province had merged. They had built a new building, if you remember, on Granville and 7th. The building at the corner of Cambie and Hastings became available for sale. It seemed like a nice building. I had never owned a building that size. I made an offer on it, $100,000, and they countered back. Then the building behind, the one on Cambie and Pender, came on the market and I wanted that. So I had two great buildings opposite Victory Square. But the problem was that the area wasn’t the greatest. Victory Square, where they had all the big problems. It had led the East End. Homelessness. The drug addicts. They’ve moved now a couple of blocks east, but they’re still there. Anyway, I bought the building because nobody else liked the area. So what am I going to do with the building. So I had this (former newspaper building) for $100,000, but they didn’t even broom-sweep it. That’s something that goes into a contract . . . Newsprint everywhere. There’s dirt. (The former owner) said to me: ‘Well, you own it now. It’s yours.’ So I said okay. I went through it. They used to print the comics – colour comics – and these printing presses were up on big bunker. Concrete bunkers . . . I was curious as to what was under these big printing presses under the bunkers. I went in and I took a look and I saw (what looked like) a huge painting or portrait or something wrapped in this very fragile newsprint. I took it out and I opened it, and this was a very valuable painting of the founder of Southam Press. But I didn’t like the painting. He was no relative of mine, and I decided that maybe he (had) a relative or someone else. So I went through the phone book to find somebody by the name of Southam, because the Southams were the founders of the Province. I found a Southam entry . . . and I picked up the phone and I said: ‘Are you related to this guy, whatever the name was on the painting, and he said, ‘Yes, he’s my grandfather’ or something. ‘I said, well, I’ve got this painting here and it’s a Southam painting. Would you like it?’ He said, ‘Well, yeah, what it going to cost me?’ I said, ‘The price of a cab fare. Come on down and pick it up, and I became very good friends with Gordon Southam for many, many years until he died.”