We’ve turned the corner and the folks of Marcus &
Millichap are resetting the bar with major changes to
the firm’s structure and market position
Major changes are at work at Marcus & Millichap Real Estate Investment Services, changes that will impact both its leadership and its market position. But unlike so many recent
industry makeovers, this one—to hear the insiders tell
the story—isn’t a delayed reaction to the recent economic woes or a mad grab for a safe-haven market
niche. Rather, they say, two new initiatives are the fruit
of seeds planted in the
firm’s core business,
changes years in the making and now ready to harvest. A third development currently in play is simply a
matter of time and timing.
This year, Marcus & Millichap is planning to both
formalize its institutional platform and broaden its
investment sales brokerage activities on a global basis.
The third issue, news of which GlobeSt.com broke last
month, is the retirement of president and CEO Harvey
E. Green and plans to search for a successor.
“The world does not need another commercial services company without an effective strategy,” says chairman George M. Marcus. “The company was founded
on the belief that coordinated marketing and a commitment to service add value.” The institutional and
global efforts, he adds, are extensions of that focus.
Clearly, the focus works for the Encino, CA-based
firm. Since 2000, when Green was promoted to his current position, the company has grown from 22 offices
to 76, currently housing some 1,200 brokers. And even
last year, though the industry sustained an 80% hit to
deal volume, the shop was buoyed by “our dominance
By John Salustri
in transactions below $20 million,” according to senior
vice president Hessam Nadji, and managed to close
some 3,400 deals. In fact, according to the firm’s
research, Marcus & Millichap ranked as the top broker
of apartment, retail, office and industrial sales transactions priced at $1 million and above. By dollar volume,
it placed second.
Green himself says the institutional push has been
in the works for a number of years, holding back until,
as he puts it, they “had a better mousetrap.” Building
that mousetrap took an investment in the hundreds of
thousands of dollars on programming, technology,
training and support—at a time “everyone else was cutting back,” he points out. The full rollout will start
within the next quarter, with SVP and managing director Linwood C. Thompson spearheading multifamily.
Next up will be retail and then office.
As Green indicated, Marcus & Millichap has trafficked in the institutional arena for years and already
has a team of dedicated brokers and originators.
According to William E. Hughes, the SVP who heads
Marcus & Millichap Capital Corp. (which closed 378
financing deals last year totaling $784 million), it’s a
nuanced sell, more about relationships than one-off
deals, so it tends to be a more senior-level endeavor.
“The senior loan originators who cater to institutional finance have been in the business longer, with a
more analytical skill set,” he says. While there is no
great divide between the institutional and private disciplines, he says the former is “a natural evolution. You
learn the nuances and move up the ladder to do business with bigger and ultimately institutional clients.
This develops over time.”