Smart Business spoke with John M. Leonard, first vice president and regional manager of the Atlanta office of Marcus & Millichap Real Estate Investment Services, about the advantages a third-party real estate firm can provide when you’re buying or selling property.
Why should sellers of real estate utilize the services of a third-party agent or firm?
Building owners should utilize a third-party intermediary or brokerage firm when selling their properties in order to achieve the highest possible price for their real estate, while ensuring that their long-term investment and wealth strategies are executed. At this juncture, sellers are facing declining but slowly improving property values in many markets nationwide. Those values, combined with historically low interest rates, make it an opportune time to buy real estate. Now more than ever, sellers require the knowledge of a market expert who understands how to achieve the highest price per square foot, while maintaining the investment goals of their clients, all while having superior knowledge of the submarket in which a property is located.
The key to maximizing value for the seller is the ability of the agent to create a market for each asset. The primary driver to a competitive bidding environment is broad exposure. With the right representation and marketing, an agent will provide a professional package with defensible underwriting to a large universe of qualified buyers. The result is usually a number of offers from which the seller can decide which best meets their objective with regards to price and terms.
For example, Marcus & Millichap was founded 40 years ago on the premise of making a market for each property we represent. Each agent in every city across the country should have the ability to match the property he or she is listing with the largest pool of pre-qualified investors. That’s the advantage a third-party intermediary can offer: Unparalleled access to investment capital from a variety of sources, including private investors, REITs and other institutions.
With four decades of investment brokerage specialization and the largest sales force in the nation, Marcus & Millichap has access to the largest pool of qualified investors in the industry, including private and institutional investors and 1031 exchange buyers. Each agent has relationships with hundreds of investors, and through these relationships and our marketing network, we operate without geographic limits, making a market for each property by accessing capital from coast to coast.
How can a third-party intermediary firm like yours provide such deep access to U.S. investors?
We have created a property marketing system that contains an extensive inventory of investment real estate, which is enhanced by the expertise of our 1,200 investment specialists. Over the years, we have developed a powerful system for maximizing value for sellers of commercial real estate. One of the cornerstones of this marketing system is our ability to generate the broadest possible exposure for every property locally, regionally and nationally. By making a market for each property, we maximize value for our clients.
This central property and listing database enables the instantaneous communication of listing information to our agents across the country. An agent can specify a client’s property investment criteria. When a matching property is listed, the agent is immediately notified. This system serves as a valuable tool, matching each property with the optimal investors. With an understanding of the owner’s objectives and a thorough underwriting of the property, an integrated marketing plan is then developed. Agents identify and target the most qualified owners and investors locally, regionally and nationally, specifically matched to the property. Marketing materials are then presented along with follow-up contact.
What additional marketing efforts would you recommend?
Further marketing efforts come from advertising in national, regional and local publications to create the broadest exposure for exclusively listed properties. Also, in some of our biggest markets nationwide, we host investor symposiums, supported by our national research group, to educate investors on market conditions and investment trends and to showcase new property listings.
This results in maximized value for sellers, one property at a time. By dedicating all of our focus, resources and training to real estate investment services, we offer an unmatched level of experience and expertise. Investment specialization and submarket focus also results in strong relationships with private investors nationwide and even abroad. Any good brokerage intermediary should encourage a culture of information sharing, not competition.
In addition to marketing, what other services does a premier third-party intermediary provide?
A firm should be able to provide a spectrum of investment and financing services to each client. We enhance our brokerage services by leveraging the expertise of our subsidiary firm, mortgage broker Marcus & Millichap Capital Corporation (MMCC). In today’s challenging financing environment and as underwriting standards continue to remain tight, we provide access to a wide array of lenders and financing solutions across all property types and markets.
Also, our dominance in the private investor market results in substantial capital seeking larger, institutional properties. Our specialty groups have long-term relationships with the nation’s most prominent institutions and assist them in market analysis, acquisition and disposition of properties nationally.
What is the role of a specialty group in brokerage firms?
Our specialty groups provide investors with in-depth expertise on each major property sector, as well as some niche sectors. Our biggest group, the National Multi Housing Group (NMHG), provides institutional and private investors with guidance on the U.S. apartment sector. The National Retail Group (NRG) provides investors with investment and capital solutions in the single- and multi-tenant retail sector. Our National Office and Industrial Properties Group (NOIPG) provides investors with investment services related to the office and industrial sectors. Additionally, we have our Net Lease Properties Group (NLPG), National Hospitality Group (NHG), National Self-Storage Group (NSSG), National Manufactured Home Communities Group (NMHCG), among others.
One of our specialty divisions, the Special Assets Services (SAS) division, provides unique services to investors whose properties face distressed situations. During the height of the economic downturn in 2009, the SAS marketed and closed more $1.7 billion in transactions for financial institutions and government agencies. The division encompasses nine regions across the nation and provides a full array of capabilities to lenders. Services range from property evaluation, market assessment and valuation to asset management and sales.
John M. Leonard is a first vice president and regional manager of the Atlanta office of Marcus & Millichap Real Estate Investment Services. Contact him at [email protected] or (678) 808-2700.
