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COMPANY PROFILE: A formula for fortitude

Marcus & Millichap's recipe for success is simple: Do your homework with the best tools available, then share what you learn with everyone you know.

"What is our goal? Our goal is to be the premier investment brokerage firm in the universe."

Harvey Green speaks those words with sincerity. Marcus & Millichap's COO since 1996, Green was recently named president and CEO of the firm - the largest real estate brokerage in the nation that focuses solely on investment sales.

"There are two things every seller wants," says Bernie Haddigan, national director of the company's retail division. "Everyone wants the highest price for his or her property within the time frame he is looking for, and every client wants it to be a smooth process.

"To meet those criteria," Haddigan continues, "we evaluate each property and package it accordingly. Once we understand its true value, we can then expose it to the widest range of qualified buyers. In a sense, the National Retail Group (NRG) is really both an art and a science."

Declared a formal division in April of 1999, the NRG currently consists of 140 brokers, with four or five retail specialists actively selling in every Marcus & Millichap office.

The science ingredient Haddigan refers to is no doubt a result of the detailed property analyses and comprehensive market research provided by Marcus & Millichap's three-year-old research division. Dedicating $4.5 million annually to research, the firm spends considerable time and energy learning the ins and outs of each local market it serves. Providing information on everything from vacancies, rents and construction activities to traffic patterns, crime and employment trends, the company's research division is nothing if not thorough.

"We've consolidated our research into a national resource `think tank' of sorts to create a more synergistic environment," explains Green. "Although the majority of the research is now centrally located, each person also has a local responsibility by product type."

According to Green, this full-time think tank allows Marcus & Millichap to provide specific local indicative data to clients. "Most research is historical in nature, like a lemming looking back and wondering how it got to where it is," says Green. "We want to flip that over and project trends through indexes that are predictive in nature."

Such predictive research has added efficiencies "that just weren't there before," adds Jeff Goldman, regional manager for Marcus & Millichap in Long Beach, Calif., an office with 28 brokers.

"Brokers don't go into meetings empty handed. They're able to give much more dynamic presentations with more detailed facts and figures. I know for a fact our ability to produce quality research has won over clients on many occasions."

The best tools available

Helping it to generate such robust research is another of Marcus & Millichap's chief company philosophies: be an early adapter and innovator of technology.

Marcus & Millichap has maintained a central property and listing database since the early 1980s. The system combines an inventory of income property with a large pool of investors. Dubbed "MNet," the latest version of this internal inventory system is actually an integrated web-based tool. It enables brokers in all 34 offices instantaneous access to property listings across the country.

"Regional markets change quickly; they're very dynamic," says Haddigan. "At any point in time, MNet might have 2,500 nationally listed investment properties, with approximately 450 separate exclusive retail listings." Each property listing contains vital financial and marketing information, and the listings can be updated in real time.

"Additionally, our MNet gives us the ability to provide agent access to very specific data by product type, by legal issue, by economic issue, and by a realm of other parameters," adds Green.

A number of departmental Intranets exist as well. Organized by product type, departmental websites feature organized chat rooms, and sort and search capabilities. The NRG Intranet, for example, includes construction statistics and financial modeling tools. "It's a very data-rich infrastructure," says Haddigan.

Sharing what they know

Given that Marcus & Millichap's MNet is, in and of itself, a real-time database of properties that can be updated on the fly, sharing of information between brokers at the firm is a given.

"There is a huge advantage in sharing information, and brokers that don't want to do it, won't want to be here," Goldman says. He compares the company's mandate of sharing all property listings to a jigsaw puzzle. "If you only have 2 of the 500 pieces, you cannot be successful. But, when you have all of the pieces, you are able to find better matches and make the picture come together."

Green offers another analogy: "Take the example of an art collector. If I have a piece of Impressionist art for sale, a collector who wants that piece will buy it at a premium price because he cares about the art and wants to add it to his collection. He basically has a vested interest in it.

"But if I have a buyer who collects Modernism," Green continues, "and I'm trying to convince him that the Impressionist piece is really worth his money, he won't necessarily jump at the opportunity to buy it. And he probably won't buy it until he can get the best value for it. That's the way investment real estate works, too."

With 30 years under its belt and some 500 brokers nationwide, Marcus & Millichap is showing no signs of a slow down. As of the end of November, with another month to go before the end of the calendar year, the firm had completed 408 separate retail transactions in 2000 each averaging a $2.5 million to $3 million sale price.

"We're not done growing," concludes Haddigan. "We're going to bring more efficiencies to the investment brokerage sales market - we're going to bring liquidity to an illiquid market."

1999 transactions by property type:

Multi residential:53.3%
Retail: 16.5%
Single tenant leased: 13.1%
Office: 7.7%
Senior housing: 2.4%
Industrial: 2.2%
Land: 1.7%
Hotel/motel: 1.5%
Mobile home park: 1.5%

Headquarters: Palo Alto, Calif.
Year founded: 1971
Chairman: William A. Millichap
President & CEO: Harvey E. Green
Company Web site:
Number of brokers: 560
Number of brokers in the National Retail Group: 140
Number of offices: 34 nationwide
1999 Property Sales: $5.2 billion
Number of investment transactions completed in 1999:

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