Q&A: Marcus & Millichap Capital Corp.’s Evan Denner on the “One of a Kind” Alliance with M&T Realty Capital

The surprising announcement earlier this month that Marcus & Millichap Capital Corporation (MMCC) had formed an alliance with M&T Realty Capital didn’t come out of the blue. For both companies, the agreement fulfilled some longstanding goals along with increasing growth capacity for the future. Connect CRE spoke with Evan Denner, EVP and head of business at MMCC, for a look behind the deal. 

Q: How did the M&T Realty alliance come to fit into MMCC’s plans for expansion? 

A: We have for many years been looking at all of our agency options and opportunities, including acquiring a DUS lender and various forms of partnerships. We actually had a wonderful relationship with PGIM that was extremely successful, but we wanted to be able to take credit risk on Fannie Mae transactions and unfortunately, PGIM wasn’t able to provide that to us.  

But M&T had a very successful 10-year relationship with HFF which terminated upon HFF’s acquisition by JLL. Shortly after that, Michael Berman, who is the CEO of M&T Realty Capital Corporation, was looking for a replacement company. We were looking for a company that would provide us with the opportunity to take credit risk, and we entered into some preliminary discussions which thereafter turned into a unique, one-of-a-kind strategic alliance. 

Q: Is this the first alliance of its kind for MMCC? 

A: It is. Historically, we have had a correspondent relationship with PGIM, and this is our entry into taking credit risk, having capital at risk. 

Q: Zeroing in on the credit risk aspect, what are some of the benefits to both you and M&T Realty to have that kind of credit risk relationship? 

A: For M&T, they get to tap into our vast brokerage network. We’re certainly one of the leaders in the origination of multifamily assets, and M&T gets to tap into that. We’re originating this product—not always exclusively to them because our goal is to provide the best service and the best results to clients, and that means being able to clear the market. So it’s not always an agency transaction that is the best solution for a client, but now when an agency is the best solution, we have the ability to make credit decisions alongside M&T on these transactions, work closely with M&T and their underwriters on these transactions and ultimately have greater access to the agencies through M&T. 

Late last year, we also hired Paul Lewis, who’s a 20-year Fannie Mae vet, to head up our agency practice. So this agency segment—Fannie, Freddie, FHA—is something we’re very focused on increasing our presence in, notwithstanding the fact that in 2020, we closed approximately $2.5 billion of agency transactions. 

Q: Is greater access to the agencies the main purpose that’s being served here, or are there several others? 

A: It provides us a better understanding of the agencies, because of this close relationship and partnership with M&T. It provides us with access, through M&T, to the agencies, to their expertise and their tools, and really streamlines the process because we have this singular and unique relationship with M&T. 

Q: Are there other areas in which MMCC has goals or plans for expansion in the future?

A: We dominate private-client transactions, which are transactions between $1 million and $10 million, and I don’t believe there’s a firm that closes more volume than we do. We continue to build our private-client strengths and capabilities through new hires as well as providing best-in-class resources to allow our originators and support staff to originate and support more efficiently and more effectively—again, driving the client experience. We’re also interested in building out more mid-market and institutional practice, which is something we’ll be doing over the coming months and years.