M&M/Interview Questions – Flashcards
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When was Marcus & Millichap founded?
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in 1971
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On what basis is the entire real estate investment brokerage business run?
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It is run on longer-term relationships and an exclusive listings basis
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What does it mean to qualify a buyer?
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Determining if the buyer has the funds and desire to buy
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So if a buyer is qualified, then:
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he has met all of the financial and technical requirements needed to complete the sale
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T/F: Marcus & Millichap closes more Transactions than any other firm:
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True: M&M closed 1,663 transactions last year, almost 500 more than CB Richard Ellis (1,176)
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Marcus & Millichap are the:
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predominant source of private capital throughout the industry
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How many investment professionals do M&M employ?
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over 1,200
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How does M&M create the most productive environment for its investment professionals?
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by providing investment specialists access to the industry's most powerful marketing platform as well as comprehensive research
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How does the management team offer invaluable support to agents?
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by fostering a positive mentor relationship, providing guidance in creating and executing a winning business plan, and sharing market information and insights
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Agents who pursue a sales career with M&M benefit from:
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• 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
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What do new associates learn in M&M's training and mentoring program?
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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.
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Is Marcus & Millichap a privately or publicly held firm?
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M&M is a privately help firm
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How is M&M one of the fastest-growing companies in the brokerage business?
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• 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
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What is the range of real estate investors M&M works with?
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All types, from private, entrepreneurial entities to the nations largest institutional owners
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What is M&M's research methodology?
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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
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How many reports does the research division publish annually?
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over 2,000
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What are the M&M specialty groups?
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• apartment • retail • office • office research • industrial • medical office • single-tenant • self-storage • hospitality • seniors housing
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How does M&M get maximum value for their clients?
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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
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What is Mnet?
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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
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Using the Buyers Needs function of Mnet:
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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
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What change was M&M instrumental in making in the commercial real estate industry?
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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
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How would M&M build this trust and confidence?
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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
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What is having a "critical mass" of brokers?
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Having a large enough group of brokers so that you can effectively canvass 100% of the owners that are in a particular property type
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What are the advantages of having a critical mass of brokers?
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more brokers = more access to owners → not only did more business come in, they also did a better job with existing clients
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How was M&M able to create a more efficient marketplace?
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by using cutting-edge technologies to facilitate information sharing
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What does M&M want to be noted for in the commercial real estate industry?
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for professionalizing the commercial real estate industry
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What is M&Ms focus in the brokerage industry?
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solely on investment sales
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Who would their clients be?
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small and mid-sized private investors
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What does M&M do to offer more than other brokerages?
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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
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When Harvey Green took over, what did he implement to make sure every agent is supported by the firm?
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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
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Describe M&Ms specialty groups
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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
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Who leads the specialty groups?
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a managing director and an executive committee
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What are the benefits of specialization to the client?
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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
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What are the benefits of specialization to the agent?
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having multiple specialty groups in place allows agents to move clients into different property types as shifting asset preferences and market circumstances dictate
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How is M&M able to create competitive offers and ultimately a higher price for our properties?
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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
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How can M&M convey the future value of an asset?
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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
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Putting an emphasis on the potential of the community around an asset will:
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ultimately generate a higher price
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Why do sellers like to work with M&M?
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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
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Why do buyers like to work with M&M?
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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
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When did the Ft. Lauderdale office of M&M open its doors?
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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
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Describe the three steps of the market research process
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- 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
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What are the founding principles of M&M?
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the sellers & buyers database, the culture of information sharing, and the market research expertise
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Does M&M dabble at all in leasing?
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No; solely investment sales
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What is underwriting?
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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
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CAP Rate =
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Annual Net Operating Income / Value (the original cost to buy the asset
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Over a period of growth, has M&M seen a change in their customer base?
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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
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Who are M&Ms biggest clients?
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Wells Fargo Bank, Prudential, Equity Residential, the Principal Financial Group, Associated Estates Realty Corp
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How is M&Ms market research more "granular?"
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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.
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How is the private market integrating with the institutional market?
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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
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What is Buyer Needs feature?
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automatically pairs buyers needs with M&M listings
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MMWeb
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easy access to vital info and tools
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Marketplace
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marketing materials
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Reach
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bulk email solution
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iMpact
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automates the assembly of critical info for a proposal to list property
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MapNet
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web-based mapping, national demographics
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Liaison
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marketing and document exchange
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Merlin
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research tool on ownership data
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Intouch
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customer relationship management tool
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CoStar
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provides confirmed sales information on major property types nationally
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RealQuest
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provides tax assessors information on properties and transaction recordings in your area
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What change was necessary during the recession
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getting everyone back to value added brokerage
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What was Project Renewal?
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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
