- December 4, 2020
Marcus & Millichap doesn't want to be like other commercial real estate brokerages.
To differentiate itself, it specializes in investment sales of properties priced from $1 million to $20 million. There's no leasing, no management.
But the differences don't stop there.
The publicly traded company also takes pride in taking in inexperienced talent and turning out successful agents through an intense, mentor-led training program.
It encourages cold calling and specialization among brokers, and makes a point of continuously training its people regardless of their experience or skill level.
“We're intentionally very specialized,” says Ari Ravi, who joined Marcus & Millichap's Tampa office in 2008 as a broker and in mid-2015 became a company regional manager.
“We're big believers that agents should not try to be the jack-of-all-trades but rather the master of one when it comes to real estate.”
The formula appears to be working. In 2015, and again last year, Marcus & Millichap's Tampa office — with 50 agents — generated more than $1.2 billion in transactional volume, making it among the most productive firms along the Gulf Coast.
But perhaps the biggest difference between Marcus & Millichap and its competitors is that the firm doesn't seem to care so much about making deals. Instead, it says it's focused primarily on building relationships that it believes it can convert into transactions.
“Without a doubt, commercial real estate is a numbers game,” says Ravi, 37. “But we're interested more in being an adviser than we are in transactions only. We tell our people all the time that you have to think less about making money in order to make more money in this business.”
To spark relationships, Marcus & Millichap trains agents to cold call property owners continuously. If a landlord isn't interested in selling, the firm offers to share market information that might be pertinent or evaluate a building's rent roll until they are.
“Our goal is to meet every single investor in every market we're in,” Ravi says. “Our belief is that if we have a relationship, eventually that person will transact with us. Until then, we try to add value where we can.”
Marcus & Millichap also focuses on the $1 million to $20 million price range because “it's more sustainable for our business,” says Ravi.
“Eighty percent of all commercial deals fall within that range, which means there's a high velocity of deals and a lot more opportunity. It's a unique niche but also a unique platform for people without a ton of real estate experience. That's why we conduct a lot of systematic and methodical training.”
Clients say Marcus & Millichap's methods pay off.
“They see both the buy side and the sell side, so therefore they're capable of making deals that work for everyone,” says Liz Schlesinger, founder and CEO of Merit Hill Capital, a New York-based company that specializes in self-storage investments and owns more than 200 properties in 26 states.
“And they're very clear at Marcus & Millichap who the client is, and they work to get the best outcome for them,” adds Schlesinger, who has acquired more than a dozen properties using the firm's Tampa office during the past decade. “I deal with brokers all over, and Mike Mele with their Tampa operation is easily one of the best I've worked with in the whole country.”
Marcus & Millichap traces its history to the early 1970s, when Grubb & Ellis broker George Marcus concluded the path to success in real estate could be found in specialization and agent collaboration. At the time, commercial agents largely bounced from sector to sector chasing commissions and used sometimes cutthroat tactics to win business.
Today, the firm has 80 offices nationwide, including four in Florida in Tampa, Orlando, Miami and Fort Lauderdale. It also maintains satellite operations in Jacksonville and Fort Myers.
Last year, the company generated a combined $33 billion in transactions.
To foster collaboration among its agents, Marcus & Millichap has developed a unique multiple list service exclusively for the firm. “MNet,” as it is known, allows agents from across the U.S. to view listing information and link properties and buyers together.
“From day one the idea was to import capital to local markets we served,” Ravi says. “We constantly teach fundamentals, and that if our agents stick to those fundamentals they can make a good living in either an up or a down market.”
That's not to say that he believes Tampa is in danger of a downturn anytime soon.
“I see blue skies ahead for Tampa,” Ravi says. “Even with all the growth we've had, we're still only the 18th or 19th largest (Metropolitan Statistical Area) in the U.S., so I think we have a lot of upside going forward.”
With Marcus & Millichap's platform, Ravi also sees a lot of upside for the firm itself.
“We have a whole different outlook,” he says. “It's really apples to oranges compared to how other firms do business.”