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Building Client Success in Any Market

The disruptive force that was the 2020 pandemic found Marcus & Millichap continuing to innovate in ways to serve its clients better, even as other real estate services firms focused simply on riding out the storm. However, building on its history of staying a few steps ahead, the company had been gathering momentum for lasting change since at least 2016, when Hessam Nadji assumed the role of CEO. 

“Periodically, there is a need to refresh the vision, culture, and leadership thrust to make the company stronger with a sharpened focus on the future,” Nadji says. “This was such a window in our evolution, so we took a holistic look at the market, our position, strengths and weaknesses, and evolving client needs with a fresh eye.”   

Nadji and the company’s senior leadership saw this as an especially opportune time to conduct surveys and focus groups internally and externally, to secure input from its sales force and clients. Through this process, the team refreshed the company’s long-term strategy, which is built on four key charters: further building the company’s leadership in the private client segment; increasing its penetration in larger, institutional transactions; significantly expanding its financing service capabilities and market coverage; and further expanding the advisory, research, and consultative foundation of providing client services. 

“In 2021, there were 47,740 commercial real estate transactions in the U.S., of which 84% traded between $1 million to $10 million,” says Nadji. “This micro-cap base is predominantly made up of private investors, many of which are passive individual investors, friends, family, and small partnerships as well as professional traders and private fund managers.” 

Within this universe of micro-cap transactions, the top 10 brokerage firms—including Marcus & Millichap, the front-runner in this space—represent “just 25% of total transactions, with the rest brokered by small local and regional firms, individual brokers, and many principal-to-principal transactions.” 

Given the size and fragmentation of the private client segment, “we found that even in apartments and retail, which have been the company’s leading market segments throughout our history, there is still significant room for growth,” says Nadji. .At the same time, there was also an opportunity to build presence in other major property types, especially office, industrial, hospitality and self-storage.  

Increasing Marcus & Millichap’s presence in the institutional sector was a natural expansion strategy, Nadji explains. “About 10 years ago, we anticipated that many private investors, particularly aging Baby Boomers with significant long-term real estate equity, would seek larger, institutional quality properties as a path to consolidate their portfolios.“ 

The result of this projection was the establishment of the Institutional Property Advisors (IPA) division. By 2016, says Nadji, “the initial success of IPA gave us confidence that we were on the right track and should get more aggressive about this growth strategy as we began to prove our ability to bridge the private and institutional segments and add value for clients across the board.” 

To expand the company’s financing service capabilities and market coverage, Marcus & Millichap Capital Corporation (MMCC) was created as a financing intermediary to help borrowers secure the most competitive rates and terms. “The integration of this critical service with our sales force to provide a more holistic service has been and remains a clear opportunity to build stronger client relationships, capture more repeat business and grow revenues as a result,” Nadji says.  

In growing the MMCC platform, two key strategies became clear: growing capacity by adding experienced, accomplished financing professionals and teams and acquiring complementary financing firms; and building out service capabilities, notably agency lending for multifamily and loan sales, which are complementary to the company’s existing financing activities. 

Behind Marcus & Millichap’s high transaction velocity—averaging 53 per business day in 2021—is “an extraordinary amount of research, market information, performance benchmarking, and economic and financial analysis that our nearly 2,000 professionals provide to owners and investors daily,” Nadji says.   

This goes back to the reason Nadji joined the firm in 1996: “to help set up a unique, research and advisory service-based connectivity between our sales force, owners and investors while shifting the brand to a leading source of research. We have come a long way to accomplishing this but given the rapidly increasing sophistication of the client base and the opportunity to position every one of our professionals as a long-term, trusted advisor, there are many ways we can further build on this concept.  

“An increasing number of investors are also coming directly to the company for research, consulting, and analytical work as they look to develop strategy before executing transactions,” he continues. “We see this as another growth opportunity.”  

Once the business strategy was refreshed, it became critical to design the right execution strategy and priorities for getting there. “We had, and still have, the same fantastic foundation in our unique business model, culture, and personality of the firm,” says Nadji.  “But everything else was in need of a major push out of the comfort zone. “ 

This required refreshing the company itself and updating plans, resources and most importantly, priorities, Nadji says. The process entailed the following strategies: 

  • Reshaping and expanding the leadership and management teams. 
  • Re-energizing the collaborative culture of the firm and pride of association. 
  • Increasing productivity and ease of doing business for the sales force by significantly increasing investment in technology, innovation, support personnel and systems. 
  • Advancing the firm’s market-facing technology to enable investors’ connectivity to our industry leading inventory, sales force, and research content.  
  • Elevating direct client content, information flow and knowledge-based brand awareness.  
  • Complementing the company’s traditional organic growth model with select, targeted acquisitions, as well as the recruitment of experienced professionals and teams without disrupting the highly valued and respected existing sales force the company is built on. 
  • Enhancing sales force training, internal communication and best-practices forums.  
  • Attracting and retaining the most talented sales and support professionals by making the company a great place to work through individual care, development, and diversity and inclusiveness initiatives that expand the talent pool. 

“My first order of business was to reshape the leadership team,” Nadji says. “We retired a number of legacy partners with honor, opening the field up for the next generation of in-house best of class leaders and bringing in outside talent to supplement our thought leadership and benefit from executive expertise from other industries. Our leadership team today reflects this massive reshaping.”  

The reshaping in turn facilitated the execution of the other seven strategies. “This set the foundation of how we navigated the pandemic in 2020 and achieved a record year in 2021,” says Nadji.   

In 2020, Nadji says, the company made four key acquisitions, achieved healthy earnings despite a major market disruption as transaction volumes collapsed in the early part of the pandemic and moderately grew its cash reserves. “We went completely virtual within three business days amid the economic shutdown and did not lose or delay a single transaction,” he says.  “Our team across the organization really pulled together, and the interconnectivity empowered our sales force to stay focused on solving problems for clients and helping them navigate the biggest disruption in recent memory.”

The sheer volume of transactions that we do allows us to see the largest part of the marketplace. Our teams are better able to see and better able to position and price assets according to where the marketplace is. 

J.D. PARKER, COO, Eastern Division 

The following year, the company achieved records “by helping investors move a record volume of capital across markets and product types, take advantage of record-low interest rates and put capital to work,” says Nadji. “The company set milestones in revenue, earnings, productivity, and the introduction of new tools. This further boosted our fortress balance sheet, which positioned the company to continue with key acquisitions and initiate a dividend policy in 2022.“  

One of the drivers of growth and change has been a series of key promotions and hires. These include naming Richard Matricaria and J.D. Parker as co-COOs and Greg LaBerge as chief administrative officer. Both Matricaria and Parker “started as investment brokers, became managers and grew to oversee multiple offices,” Nadji says. “They lead seven outstanding division managers who have extensive tenure at the firm successfully running major offices, and who now oversee over 80 brokerage offices.”  

“This generation of sales leadership is highly in tune with our sales force’s needs, understands technology and branding and passionately advocates change,” he continues. “The COOs also oversee our product specialty directors, who are veterans within each property type and bring technical expertise and client relationships to our sales force. This integration has been instrumental in bringing out the best of coordinated support and management to our sales force.” 

As CAO, LaBerge oversees the company’s infrastructure, technology initiatives (in partnership with CIO Ken Sayward), administrative support and research. A company veteran with roles as an agent, manager and specialty director, LaBerge came to Marcus & Millichap with an extensive consulting background in business processing.  

The company appointed Evan Denner, an industry veteran with 30-plus years of real estate capital markets experience, as head of capital markets last year. “Our new CFO, Steve DeGennaro, is a veteran Silicon Valley technology executive with extensive M&A experience,” says Nadji. “Our chief legal officer, Mark Cortell, comes from the private equity world and also has significant M&A experience.  To round out the leadership team, we added chief marketing officer Andrew Strockis, a high-ranking marketing executive at Schwab and a strategy consultant with Accenture before that.  

“The combination of in-house tenure, cultural knowledge, and fresh thinking is helping us take the entire growth vision and its execution to the next level in a relatively short amount of time,” he continues. “For me, it’s great to watch the dynamic among these thought leaders as we foster a culture of consensus and free thinking to explore ideas and encourage debate but execute with a high level of alignment. “ 

Among the firm’s key advantages, and the foundation that enables it to be nimble and innovative, is “the structure of our local management,” says Nadji. “Our regional managers are all former investment sales professionals and understand the brokerage business exceptionally well.”  

The key to success is having a highly focused management team that listens to client and sales force needs and a technology development group that partners with management on priority setting instead of making decisions in a vacuum.

HESSAM NADJIPresident and CEO 

In contrast to their counterparts at other organizations, “they are not administrators, competing agents for their accounts, or general managers. Instead, they are market leaders tasked with partnering with our sales force to provide the best client service, develop a leading local brand, hire, train, and retain the best of the best. Having a dedicated management team focused on and compensated by supporting and growing the sales force and delivering the best client service is what differentiates us.”    

The company has also grown through a series of initiatives—to include bolstering the auctions and loan sales platforms — and alliances, such as the relationship with M&T Bank that was announced in 2021. Nadji says the initiatives have been very successful “because they fit well with our core business. They came about as the result of a deliberate and specific strategy to augment and supplement our core brokerage and financing service, not overlap with them.”  

The auction platform, he says, adds another marketing channel suited for particular situations and assets. “It functions as another layer or extension of our traditional marketing system, which effectively exposes each exclusive listing to the largest and most qualified buyer pool selected for that particular property.   

“The loan sale platform enables the firm to widen the breadth of business opportunity with major lenders,” continues Nadji. “As we drive volume to many lenders as an intermediary, we can help the same lenders buy and sell loans or pools to fit their strategy and portfolio needs.  

Nadji calls the partnership with M&T “truly groundbreaking on the agency lending side. One of the best lending platforms in the multifamily business is now our partner in helping major multifamily owners and buyers access the agencies seamlessly and competitively with no added cost to the client. The partnership works because as the leading broker of multifamily assets, Marcus & Millichap and our IPA division generate a tremendous volume of sales each year and a high level of interaction with major owners regarding capital needs, refinancing, and recapitalization. Our loan originators can now bring M&T’s agency licenses, expertise, and execution to these clients, which they could not do before our partnership was set up.”   

He adds, “We are just getting started on these supplementary growth initiatives, their scaling, and expansion. It’s really exciting to see the possibilities and that they are working as envisioned.”  

Within commercial real estate, the pandemic accelerated the adoption of technology at many companies. Marcus & Millichap, though, has always been there. “Technology is in our DNA,” says Nadji, pointing out that the most basic founding principle of the platform—exposing each exclusive listing to the largest pool of qualified buyers—was “ripe for automation, technology and efficiency” from the start. 

“Our late co-chairman Bill Millichap was a major advocate for real estate technology from the beginning,” says Nadji. “By the late 1970s, the company already had a central electronic inventory system and databases that tracked properties, sellers, and buyers. Our proprietary internal inventory and buyer-seller matching system, Mnet, is rooted in that original application with countless upgrades and replacements. We were the first firm to embrace the internet. Our website went live in 1994, showing inventory online and even investing in new platforms such as LoopNet and several other real estate startups.”  

Subsequently, Marcus & Millichap started the first large-scale apartment rental directory in 1996 called “AllApartments,” which was renamed “SpringStreet” and eventually became part of “In addition, we were the first firm to introduce an automated internal system for preparing market analysis and opinion of value as listing proposals and marketing packages for clients called Mnet-Offering,” Nadji says. “This automation empowered our sales force to offer more relevant information produced more quickly to each client than ever before. It, too, is constantly undergoing refinement, upgrades, and replacements.”  

Over the past two years, the firm’s primary focus has been making client touchpoints as easy and intelligent as possible for its sales force. “As a reflection of our commitment to investing in technology, we did not reduce our tech spending during the worst of the pandemic,” says Nadji. Instead, we pivoted planned upgrades toward client-oriented features that would help investors find our inventory faster and easier on our website, access more of our research, and quickly get in touch with our sales force.  

“The key to success is having a highly focused management team that listens to client and sales force needs and a technology development group that partners with management on priority setting instead of making decisions in a vacuum.” 

Just as a tech-forward approach has been in Marcus & Millichap’s platform from the beginning, so has a client-first approach.  “Creating a client-centric business model was George Marcus’ founding vision for the firm,” Nadji says.  “This meant doing something that had never been done in starting a company that specialized in investment brokerage, financing, research and advisory services.  

“The real estate investment specialization cornerstone has morphed over the past five decades by organizing the sales force by product type and market area specialization,” he continues. “The premise of this is the belief that a dedicated specialist will accumulate a higher level of expertise and seller, buyer, and lender relationships all of which result in doing a better job for the client.   

The company’s specialization has also evolved by client segment. Creating the IPA division reflected the recognition that “institutional clients have different needs and execution requirements than private clients,” says Nadji. “By covering both markets, our IPA teams connect institutional and private capital at a granular, deal-by deal level better than anyone. This creates more value for the seller and expands investment options for buyers.” 

On the financing front, “the same dedication to specialization empowers our loan originators to craft capital markets solutions covering all property types, price points, and client groups,” Nadji says. MMCC has evolved into a top financing intermediary as a result, predominantly servicing our private investor clients in the $1-$20 million price point, a growing portion of which is being executed in partnership with our investment sales force.  

“IPA capital markets is growing rapidly within the higher price points and targeting larger private investors and institutional clients,” he continues. “The key is collaboration across these divisions and parts of the company which happens real time in the way our sales force connects buyers and sellers, borrowers and lenders and provides a steady flow of research and content to the marketplace.”  

In terms of the transaction volume this client-centric model generates, the numbers speak for themselves. “In 2021 we closed a record 13,255 transactions and $84.4 billion in total volume,” says Nadji.  “This included 2,539 1031 exchange transactions, accounting for $10.3 billion of volume and moving $4.9 billion of capital across markets.  Over 47% of best and final buyers came from out of market as illustration of our ability to ‘make a market.’ MMCC closed 2,474 financing transactions totaling $11.6 billion in financing volume, which were executed through 440 separate lenders.” 

Specialization has been a founding principle from day one. We’ve found it very effective to do a drill-down into each property sector of what a client needs from us as a service provider. 


Specialization by both product type and service is a concept that Marcus & Millichap references frequently. That specialization operates in tandem with “the entire company’s resources and scale of relationships across an entire platform that is harnessed one transaction at a time,” Nadi says. “Value is created through not just exposure, but strategic exposure to the right buyers, or going to the right lenders in the case of securing financing. Our interconnectivity, technology, and real-time communication means our clients are as close to the real market as they can possibly get.   

“Our mantra has always been to create the most value and certainty of execution through a great experience that makes our clients want to continue doing business with us,” he continues. “We value the long-term relationship above all and that means advising clients not to execute a transaction if the time is wrong for the asset or due to market factors. The fact that we can offer the most comprehensive and effective marketing machine to sell investment real estate, an auction platform for the right situation, competitive financing, and a refinancing or recapitalization path if a sale is not the right strategy brings the best of all worlds to our clients. 

2021 saw Marcus & Millichap not only reaching record levels of transactions, but also celebrating its 50th anniversary. Over the half-century of the firm’s history, the commercial real estate market has gone through numerous cycles and hence has offered ample opportunity to prove out the firm’s ability to  “make a market in any market.”   

Nadji provides insight into how that concept plays out. “Making a market in any market means that no matter what the market conditions may be at a given time, the goal is to achieve the best possible results for the client,” he says. “For example, in a disrupted market, when buyers are harder to secure, knowing who the real buyers are, how to increase the probability of a successful close, who the most likely lenders are, makes all the difference. You can’t throw an asset to the marketplace and hope it generates offers. As just one example of this manifests, during the second and third quarters of 2020, one of the most disrupted marketplaces in history, we closed 3,175 transactions by solving problems and facilitating opportunities for buyers, sellers, and borrowers.”  

He notes, “There is a real art to value added brokerage, which essentially means an expert is going to turn every stone to make a market one property at a time. Its integration of having the largest and most qualified sales force, financing experts and cutting-edge research, information sharing across nearly 2,000 professionals, professional managers in every major metro and the latest technology. This is what we do and who we are, and we are constantly taking it all to the next level.”  

While the firm takes pride in its milestone of longevity, it’s also continuing to look ahead. “Our 50th anniversary was a fantastic milestone in celebrating how we have differentiated our client services and results,” says Nadji. “It was also a key point of recognizing and protecting the best of the company’s history, culture and achievements but also knowing where we need to improve, modernize and innovate.” 

The industry will be seeing some of those improvements and innovations over the next couple of years. “We have a suite of technology updates and new applications in the works slated for delivery over the next 12 months,” Nadji says. “The primary focus is further interconnectivity of investors with our inventory, content and sales force.” 

Internally, he continues, “our automated marketing center is constantly evolving to make it easier for our sales force to share relevant content, inventory, and updates with their clients by the click of a few buttons and system assisted targeting. A comprehensive update is in the works for our lender and client tracking enterprise system on the financing front. Our research department is constantly morphing content to be as relevant and real time as possible, given a rapidly changing capital markets and economic environment.” 


A Company Created to Fill a Void in the Market 

As an investment broker at Grubb & Ellis in the late 1960s, George Marcus quickly realized that there was no real system for marketing investment real estate because all service firms were mostly focused on leasing and property management.  Investment brokerage wasn’t a specialty for the industry at the time, and therefore there was a lack of training, organization and any real system for maximizing value by accessing the largest number of buyers.   

This inspired Marcus to start his own firm in 1971, one that would concentrate only on investment brokerage.  But the model for investment brokerage specialization was taken to a much higher level of sophistication by creating a real system around the marketing of commercial real estate through the cornerstones that still drive Marcus & Millichap today.

  • The first is exclusive representation, whereby the broker commits to a target price and marketing process that represents a listing as an exclusive in the marketplace.  At the time, this was unheard of. 
  • The second is information sharing whereby details on each exclusive listing are shared with the entire sales force, enabling each broker to expose every listing to the buyers they have a relationship with, hence increasing exposure and generating multiple offers. This too was pioneering as a policy and quickly led to the adaptation of databases and technology which became part of the company’s DNA.  This policy also fostered consistent underwriting across markets and real-time updating of listings in the “system” giving buyers certainty of deliverability of each listing.  It also serves as the basis of the company’s collaborative culture with investment brokers matching buyers and sellers and loan originators finding the right financing across markets and product types. 
  • The third is providing a managed salesforce with each office being led by a dedicated, professional manager who is not also a broker and compensated as an executive of the company.  This eliminated the player-coach conflict and created a focused, consistent management culture focused on client service, recruiting and training sales and financing professionals and growing the company within each metro. 
  • Last but not least, the company developed and offered formal training and skill development programs and product type focus to ensure that each real estate segment is covered by specialists within the geographic market but also by type of asset. 

Shortly after the doors were opened and Marcus began to execute the model in Palo Alto, Bill Millichap joined as an investment broker and soon demonstrated his organizational skills in addition to being a very effective sales professional.  Marcus asked Millichap to join him in running the company and the two started their iconic partnership.   

Millichap was naturally talented at training, developing curriculum, hiring and supporting individuals to success and managing.  He also had a keen interest in technology which was fueled by ideas by just being in Palo Alto and a short drive from major tech companies.  He led the charge on all training programs and technology development and integration.  The company grew organically by opening offices as the model proved to be highly effective.   

In the mid-1990s. research and advisory service was added as a client service as was a financing division, Marcus & Millichap Capital Corporation. Both elevate the level of touch points and services for real estate investors and create an advantage for the investment brokers.