Marcus & Millichap’s Addition of Retail to its Mix–A Smart Play

According to retail analysts, Marcus & Millichap's timing was ideal in expanding its platform to include a new sector with the introduction of IPA-Retail.
Hessam Nadji, Marcus & Millichap

Hessam Nadji, Marcus & Millichap

Four years after launching Institutional Property Advisors as its multi-family brokerage division, real estate investment services firm Marcus & Millichap has expanded the platform to include a new sector with the introduction of IPA-Retail.

“As part of our stated growth plan, we are actively expanding in office, hospitality, multi-tenant retail, self-storage and seniors housing sectors,” Hessam Nadji, Chief Strategy Officer, Marcus & Millichap, told Commercial Property Executive.

IPA-Retail, as IPA has since 2010, will provide investment advisory, brokerage and capital markets services to institutional and leading private investors. The foundation of the new offshoot, and upcoming offshoots, is simple: people.

“We are achieving this [expansion strategy] through the addition of highly experienced executives in the capacity of specialty directors, who are providing training, branding and business development leadership in each of these segments to our existing brokers,” Nadji added.

Bill Rose, a vice president with Marcus & Millichap and director of the firm’s retail division, will oversee IPA-Retail.

There’s something happening in the national retail sector.  As noted in M&M’s third quarter investment survey, retail is still on the road to full recovery but the worst is in the rearview mirror. Sentiment tells the story; 55 percent of survey respondents anticipate that the value of their retail assets will rise over the next year, with an average expected increase of 2.9 percent.

“The timing is pretty close to ideal,” Michael Lagazo, senior advisor, Retail, with commercial real estate advisor Sperry Van Ness, said of IPA-Retail’s launch when speaking to CPE. “Whatever profitability there is left in the market is at a right balance, meaning we’re not at a point where there’s so much artificial appreciation that it’s just diving up prices without any added value to the assets. There has not been a balance of supply and demand as there is now in the retail market for the past seven years, so they know what they’re doing.”

While IPA may be new to the game at just four years old, its expansion into retail is being taken seriously by competitors. After all, parent company Marcus & Millichap is a veteran player in the market.

“Marcus & Millichap already has notable, very mature relationships with both accredited institutional investors as well as private investors in ownership,” Lagazo added. “[IPA-Retail] will capture market share quickly, they’ll achieve credibility in the retail market. It’s a smart play.”