M&M/Interview Questions

Describe the three steps of the market research process

- The first step of the process starts with an in-depth analysis of vital supply and demand data at a broad market level. - The second step is to analyze economic, demographic, and real estate trends in-depth, as they have the greatest impact on values at the submarket and neighborhood levels. - Finally, a detailed property review is conducted to summarize the physical, financial, and operational state of the property for valuation, comparison, and strategy. Specific comparable property rents, vacancies, recent sales and current market values are also compiled for analysis

What is the range of real estate investors M&M works with?

All types, from private, entrepreneurial entities to the nations largest institutional owners

CAP Rate =

Annual Net Operating Income / Value (the original cost to buy the asset

What does it mean to qualify a buyer?

Determining if the buyer has the funds and desire to buy

What is having a "critical mass" of brokers?

Having a large enough group of brokers so that you can effectively canvass 100% of the owners that are in a particular property type

When Harvey Green took over, what did he implement to make sure every agent is supported by the firm?

He instituted a sales intern program, where college-educated assistants are matched with select agents to help that agent with tasks such as information management, underwriting, and analysis; this would in turn free up more time for the agents to meet face-to-face with their clients

How is the private market integrating with the institutional market?

Institutions are coming down into the smaller assets. They are realizing that owning a $100 million trophy office can be risky, but owning 4 $25 million suburban offices is a more diversified play → with client company's growing, they need bigger spaces

On what basis is the entire real estate investment brokerage business run?

It is run on longer-term relationships and an exclusive listings basis

How is M&Ms market research more "granular?"

M&M has agreements with other information providers that allow their agents to get information such as the demographics that they would need to provide analysis for clients down to the census block level i.e. income levels, crime rates, population and growth rates, etc.

Is Marcus & Millichap a privately or publicly held firm?

M&M is a privately help firm

How is M&M able to create competitive offers and ultimately a higher price for our properties?

M&M is able to create competitive offers because they don't assess a property based solely on just its value against past sales, but rather as an asset that can appreciate over time

When did the Ft. Lauderdale office of M&M open its doors?

M&M opened its Ft. Lauderdale office in 1997, and has since advanced to the forefront of South Florida's commercial real estate investment market

What is M&M's research methodology?

M&M research integrates historical and current economic, demographic and real estate factors to deliver comprehensive market reports and forecasts, customized by property type and local market

What is Mnet?

Mnet is M&Ms proprietary central property and listing database that enables the instantaneous communication of listing information to our agents across the country → it combines a centralized for-sale property inventory with a comprehensive database of income property investors

Does M&M dabble at all in leasing?

No; solely investment sales

Why do sellers like to work with M&M?

Sellers like to work with M&M because the firms product specialization and detailed local market knowledge provides clients with a higher level of expertise → M&M is also likely to get the highest value for their clients through their marketing strategies and their ability to convey the present and future value of an asset to a large pool of national investors

What are the benefits of specialization to the client?

The emphasis on specialization enables the firm to bring a higher level of expertise to the transaction arena. In turn, this should translate into better results for owners and investors

What does M&M do to offer more than other brokerages?

They create create long-term value for their clients by providing equity, debt, information, and transaction services in a semi-asset managing fashion, making their clients wealthier or lowering their risks

What change was M&M instrumental in making in the commercial real estate industry?

They developed a concept where the focus was on first establishing a relationship with the seller to build trust and confidence, which would ultimately lead to an exclusive listing with them

T/F: Marcus & Millichap closes more Transactions than any other firm:

True: M&M closed 1,663 transactions last year, almost 500 more than CB Richard Ellis (1,176)

Who are M&Ms biggest clients?

Wells Fargo Bank, Prudential, Equity Residential, the Principal Financial Group, Associated Estates Realty Corp

Who leads the specialty groups?

a managing director and an executive committee

What was Project Renewal?

a redefinition of who exactly the clients were, what there needs are now as opposed to 5 years ago, and how to partner with them more effectively to achieve those goals

Using the Buyers Needs function of Mnet:

an agent specifies 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

iMpact

automates the assembly of critical info for a proposal to list property

What is Buyer Needs feature?

automatically pairs buyers needs with M&M listings

Reach

bulk email solution

Why do buyers like to work with M&M?

buyers like to work with M&M because the firm can help buyers find deals that are under the radar, and ultimately a property that will potentially appreciate over time → they also like to work with M&M because they can bring them more acquisition opportunities

How does the management team offer invaluable support to agents?

by fostering a positive mentor relationship, providing guidance in creating and executing a winning business plan, and sharing market information and insights

How would M&M build this trust and confidence?

by going the extra mile for their clients; spending more time on the analysis, appraisal, and issues related to marketing for the property, and then take this information and match the property with the largest pool of pre-qualified investors out there. Then, you would bring the most reasonable offer from the most qualified buyer

How does M&M create the most productive environment for its investment professionals?

by providing investment specialists access to the industry's most powerful marketing platform as well as comprehensive research

How was M&M able to create a more efficient marketplace?

by using cutting-edge technologies to facilitate information sharing

Intouch

customer relationship management tool

MMWeb

easy access to vital info and tools

What does M&M want to be noted for in the commercial real estate industry?

for professionalizing the commercial real estate industry

What change was necessary during the recession

getting everyone back to value added brokerage

What are the benefits of specialization to the agent?

having multiple specialty groups in place allows agents to move clients into different property types as shifting asset preferences and market circumstances dictate

So if a buyer is qualified, then:

he has met all of the financial and technical requirements needed to complete the sale

When was Marcus & Millichap founded?

in 1971

What is underwriting?

in the evaluation of a real estate loan, its assessing the borrower and the property itself; you try to figure it if the property can redeem its own value

Liaison

marketing and document exchange

Marketplace

marketing materials

What are the advantages of having a critical mass of brokers?

more brokers = more access to owners → not only did more business come in, they also did a better job with existing clients

How many investment professionals do M&M employ?

over 1,200

How many reports does the research division publish annually?

over 2,000

Marcus & Millichap are the:

predominant source of private capital throughout the industry

CoStar

provides confirmed sales information on major property types nationally

RealQuest

provides tax assessors information on properties and transaction recordings in your area

Merlin

research tool on ownership data

Who would their clients be?

small and mid-sized private investors

What is M&Ms focus in the brokerage industry?

solely on investment sales

What are the founding principles of M&M?

the sellers & buyers database, the culture of information sharing, and the market research expertise

Describe M&Ms specialty groups

they are groups of agents that cover a specific property type i.e. multifamily, retail, office, industrial, etc. → the agents in these groups receive specialized training for their respective property type, and management and the agents work hand-in-hand to oversee multiple-market transactions

How does M&M get maximum value for their clients?

through making a market for each property, expert property underwriting and valuation, their access to the broadest pool of investors, and proactively planned and executed marketing tailored for each property

How can M&M convey the future value of an asset?

through their marketing strategies, M&M can convey the future value of an asset by leveraging information about job growth, household creation, and supply and demand characteristics to a large pool of potential buyers locally and out-of state

Putting an emphasis on the potential of the community around an asset will:

ultimately generate a higher price

MapNet

web-based mapping, national demographics

What do new associates learn in M&M's training and mentoring program?

working with an M&M investment professional, a new associate will learn the essentials of the investment brokerage business, including critical research, marketing, and relationship-building skills.

Over a period of growth, has M&M seen a change in their customer base?

yes; they are now doing more business with big institutional powers due to the changes in ownership of the real estate and transactional expertise built over time

Agents who pursue a sales career with M&M benefit from:

• an affiliation with the industry's largest commercial real estate investment brokerage • an extensive training and mentoring program • strong corporate support, including legal, advertising and marketing • state-of-the-art technology and communications systems • Transaction-experienced, noncompeting managers • Comprehensive market research reports and real estate data

What are the M&M specialty groups?

• apartment • retail • office • office research • industrial • medical office • single-tenant • self-storage • hospitality • seniors housing

How is M&M one of the fastest-growing companies in the brokerage business?

• business volume as quadrupled in the last 10 years • the sales force has more than doubled in the last 5 years • the company facilitates the movement of capital across markets for properties of all sizes and price ranges