At ICSC RECon earlier this week, Mortgage Observer sat down with William Hughes, senior vice president at Marcus & Millichap Capital Corporation out of their Newport Beach, Calif. office. We talked about MMCC’s expansion plans, his firm’s focus on private clients and whether or not retail is “the new multifamily.”
Mortgage Observer: So you run the capital markets group at MMCC?
William Hughes: I am responsible for the platform and operations on a daily basis. We have about 75 originators. We operate a very national platform. They are in offices around the country. Our client base really starts with a focus on the private client segment. Our business is highly focused on private clients but we also believe, conceptually, that the combination of capital markets expertise and strong brokerage skills really bring a lot to the client. We try to be more than a transactional machine. We want to build relationships across the country—we have 85 offices and in the capital markets sector we operate in about 35 of those offices. We source capital from a broad array of lenders. And that ebbs and flows. So in certain markets, a life company would be the best lender, and in another a CMBS lender might be best.
Is the bulk of your business multifamily?
About 60 percent is; about 40 percent is in the commercial sector. And if you’d looked at us two years ago we would have been much more heavily weighted to the multifamily side. Most lenders now are looking to expand past multifamily. There is an abundance of capital chasing multifamily. A year and a half ago, even six months months ago, the environment for retail financing was different.
Is retail the new multifamily?
It sort of is. As our lender look to expand past multifamily its really the retail sector they are going to. I just hosted a panel here at ICSC and that was really the takeaway. Even though there are challenges in the commercial areas—ecommerce, etc.—the evolution of the retail sector continues. We have a client we just met with this morning who is in the process of unmalling malls, if you will, which is the new deal. Certain investors are very good at that.
How long have you been with MMCC?
Just about 19 years. I have been in this business off and on for many years. I have been a developer in the Southern California area. And I’ve been in what we call our Newport Beach office, although it’s actually in Irvine [Calif.], for 19 years now. We started growing our Manhattan office three years ago, so the eastern portion of the country is newer for us. We grew the business from the West Coast east. In Manhattan, we’ve fought that battle for some time. Now we’ve made significant progress. We have 1300 people, when you combine our brokers and our capital markets people. And we think there is significant potential for growth still.
What are your plans for 2014?
We want to continue to grow and add some really good athletes to the program. We are looking to grow about twenty percent year-over-year. We are at 75 originators and we want to be at 85 by the end of the year. We’d like to grow our Boston operation a little bit more. The northeast is where we’d really like to expand our business.