Real Estate Forum

This approach is echoed by Marcus, who believes the firm’s concept— branded Institutional Property Advisors—adds value by providing clients flexibility in how they want to operate. To that extent, he’s critical of competitors who do business on a model of sole-source marketing teams.

“That’s not necessarily the model that
produces results,” he notes. If a client
likes the sole-source approach, IPA will
accommodate, but ideally, “We want a
more coordinated marketing effort. All
of our institutional agents market an
asset and, therefore, we believe, market
it better. There are many examples of
assignments we have taken and closed
through our system after other broker-
age companies could not.”
Don Stoffle, the executive director of
dispositions for First Industrial Realty Trust in Chicago, remarks,
“Some guys wrap their arms around a listing, and it’s theirs. That’s
fine for the generic 400,000-square-foot warehouse in Atlanta.
Everybody has a good relationship with likely buyers for that.”
Not so for a 60,000-square-foot flex, high-finish building in
Carrollton, TX housing three tenants with local credit. Such assets
simply weren’t “in vogue” last year, Stoffle says. The Marcus &
Millichap team—lead by Michael Lawrence—put his listing into its
system, and “it was open to every broker in it.”
As a result, it attracted several offers, says Stoffle, pulling inves-
tors from cities around the country—which was exactly what the
client was hoping for. “The more competition, the better the pric-
ing for me,” he relates. He won’t share numbers but says the
project sold to a private buyer at a cap rate that “exceeded my
expectations.”
The firm—specifically lead broker Stan Jones—also exceeded
expectations in the mid-2009 sale of Lakeview Apartments, a 492-
unit, 20-building complex in Petaluma, CA. Alan George, chief
investment officer and EVP at Chicago-based Equity Residential,
explains that his firm targeted the complex for disposition at “a
very difficult time to sell. It was a good deal, but it was hard to get
anything across the finish line.” It took Jones and team 120 days to
locate the private buyer and close the deal—for roughly $50 mil-

GEORGE M. MARCUS

Chairman

lion—very satisfactory, says George, who also credits Marcus &
Millichap’s “great research operation.”
Key to shaping up the institutional platform was a series of
independent surveys gauging the market’s sense of service from
the brokerage industry and to define gaps therein. The results
also underscored the belief on the part of Marcus & Millichap
decision makers that what would become IPA was a natural fit for
the firm. Nadji, who is also managing director of research ser-
vices, reports that the surveys showed a need for both broad mar-
ket intelligence and the ability to tailor a strategy for a specific
client. “It got very exciting for us,” he says, “because the way we’ve
implemented our research over the years lines up so well with
what we heard they wanted.

“The value we create comes not only in the fact that we are
organized to work the way they want us to, but also that we have
tremendous access to private capital,” he continues. That access
comes largely from the private investment group, and since the
institutional model is all about relationships, “we bring our
knowledge of who’s got how much equity and the kind of product
they want to invest in.”
SVP and managing director Bernard J. Haddigan runs the
firm’s retail and special assets services platforms. He also sees the
intersection of institutional with his areas of concentration as a
natural fit. “We’ve been working with institu-
tions for years,” he notes, citing clients such as
Simon Properties, General Growth Properties
and a variety of other large owners. “It’s not
unusual to take assignments from them and
sell them into the private-client market,” he
states.

“We can expose these assets to other institu-
tions, major private investors, family funds, syn-
dicators and smaller private investors who have
between $20 million and $50 million in equity,”
continues Haddigan. “In a way, this new initia-
tive reinforces the core company focus on pri-
vate investors and our ability to bring Wall
Street capability to Main Street.”
He expects the rollout of the platform to
be relatively seamless, specifically because of
the foundation on which it’s built. He cites
those ongoing relationships on both the
public and private sides as facilitating the