LAS VEGAS—There's been a lot of news generating from Thought Leader Marcus & Millichap of late. First came the announcement late last year that it was going public. Following that an almost regular string of news headlines focused on deals and strategic expansions. Now, at RECon 2014, there was the unveiling of its Retail Trends 2014 report. In this exclusive interview, three top M&M executives, president and CEO John Kerin, senior vice president Hessam Nadji and national retail director Bill Rose, take us through the various events, with, of course, a special focus on retail.

[IMGCAP(1)] John, what's the backstory behind the firm going public?

John Kerin: The backstory is really simple. We specialize in the $1-million to $10-million transaction. We're the only brokerage that does specialize in that. It's only natural that we take that platform and continue to grow it. That's really the backstory of what we're trying to do. This will help us as we take some of our clients and move them into $10-million and $20-million transactions. So it's a natural move for us to take our business and let the world see. It's also a big brand opportunity. Over the past few weeks, I've been able to meet with a lot of brokers around the country who didn't really know a lot about us but now want to get into our company. Now people are starting to understand because our commissions are public and they understand that we are the real thing. Retail is on its way back. But Bill, is it time to pop any champagne corks?

Bill Rose: I don't think retail ever left. In 2009 it became the flight to safety. Our firm produces more transactions in that space than any other firm, and it's an all-cash business because people understand retail. They can go to their neighborhood grocer, they can go to the drugstore, they can go to that fast-food restaurant and it makes sense. Is it on the way back? No. It never left. It's on a big momentum curve right now and that hard asset class is in big favor. So we're seeing a lot of demand, a lot of good product quality and the good news is it's not going away.

(The full video interview is available at the end of this story.) How does the market look from the perspective of your firm's activity?

Hessam Nadji: Well, Marcus & Millichap has had a dominant retail presence for many years. Retail is our second largest business behind apartments and we're the leading broker of retail properties, especially in the single-tenant net lease sector. Bill's comments about the safety play that retail benefits from has a lot to do with single-tenant net lease, which captured a lot of equity that came into the market during the worst of the recession. And we're seeing more and more capital coming in. Plus Baby Boomers needing an alternative investment seek out the sector because the yields are very, very attractive. For Marcus & Millichap, our biggest opportunity is to take our retail practice and expand it, and given the combination of the market momentum that Bill talked about, and the public advantage that John talked about, it becomes a matter of executing an overall growth plan. Retail for us is a very top priority. Hessam, what did you mean when you said you've advised clients not to overthink deals?

Nadji: My comment about not overthinking buying opportunities has to do with the fact that interest rates are still very, very low. We see a lot of clients get very close to transactions that make sense only to be overwhelmed by fear because of a lot of negative press. If you look at trends over the past five or six years, the supply/demand part of the equation is very favorable and the interest rate part of the equation is also very favorable. In fact, the outlook for interest rates is usually driven by job growth. The only reason we'd see higher interest rates is if job growth actually does better. If not, there is no real driver of inflation or significantly higher interest rates. This dynamic and balanced relationship between job growth and interest rates creates a sort of safety net in this environment. So we try to counsel investors not to get overly influenced by negative factors and look at the underlying data that supports investment. Bill, what's the major takeaway form Retail Trends 2014?

Rose: The takeaway is really straightforward. After five years of almost no new development, we have a number of retailers in the marketplace seeking asset locations, whether that be a ground-lease deal or a long-term lease deal. New development is going to come in 2014 and there are a number of new projects slated. And, as Hessam pointed out, in terms of demographic trends, we have a whole new generation of consumers coming to market. So demand is back, locations are scarce and we have a lot of growth coming. John, what's the overall outlook?

Kerin: We've got things set up very nicely. We've got group directors in every one of our product types and we're able to fire on all cylinders. Here's the thing. Next is market share. It grows every year and we want it to keep growing, not only in retail, but in multifamily and office and industrial, and in our product groups in addition to the four core. That's where our game is right now. That's what we're moving to. If we do that, we'll be in great shape. Then later on, maybe buying a company and getting more into the capital markets. But right now the future is really solid in terms of what we're doing and it will continue because of our disciplined management team.



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John Salustri

John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.