Marucs & Millichap a step below CBRE/JLL/C&W?
Scrolling through articles on here, I always notice that companies like Marcus & Millichap, SVN, Savills Studley are always considered a tier below the CBRE/JLL/C&W. How would you guys who have maybe had experience working in some of these shops say they line up and compare? When I think of big CRE brokerage shops, i have about 6-7 that come to mind but when referring to big shops, typically all I hear about is CBRE/JLL/C&W. As someone who just graduated and has a few different offers/options to choose from with CRE brokerage shops now, would you say that it is essential to try and get a position with JLL/CBRE/C&W or would you say that it would be just as good starting out at a shop like Marcus Millichap/SVN/Savills that is still a big firm but maybe not as big as a CB. Would love to hear you guys thoughts. Thanks.
It all depends on what you make of your time at each shop and who you align yourself with (joining a team). Marcus & Millichap and SVN have some strong teams internally and they dominate in the Private Client arena, but their hiring standards are below those of CBRE/JLL/CW, as in they have a lot of employee turnover. I wouldn't go to Marcus or SVN without aligning yourself with one of the higher-performing teams ahead of time. CBRE/JLL/CW would be the way to go in my opinion because you will have better success at any level. (BTW I am a former Marcus broker, now at a boutique REPE shop). [ individual 2nd tier broker individual 1st tier broker joining a powerhouse team at 2nd tier firm good-great team at 1st tier shop] Hope that helps
This is very helpful, thank you. I agree that it seems to be largely about getting placed with a strong team. The ultimate goal for me is to eventually get some sort of acquisitions position at a repe. Would you say that going the brokerage route out of school is a good stepping stone to that or do you think it is feasible to go ahead and start applying to try and get an analyst position with a repe?
If your ultimate goal is to Work for a REIT, REPE, or any other Investment Group in Real Estate, I would go the analyst route. You can then work your way up to those positions and you are paid salary and bonus. I had to go at it the hard way, as I graduated from college in 2008 (we all know how that went) and brokerage was the only option. I worked on a great investment sales team with Industry veterans for a while and made great money. I just didn't want to be in Investment sales long-term (be a middle-age person still pitching). Its harder to lateral into acquisitions roles, not impossible though. I would just go about it from the analyst role.
There are exceptions by market and team, but overall I view brokerage tiers as such:
Tier 1: Eastdil, CBRE, JLL, HFF Tier 1.5: Cushman & Wakefield Tier 2: NGKF, ARA, Moran & Co, Berkadia Tier 2.5: Colliers Tier 3: M&M, SVN, and Savills Studley, NAI, Transwestern, Cresa
It really, really depends on market. Also, Eastdil and HFF don't always even apply depending on what you're doing.
CBRE is the best broker, IMO.
JLL, Colliers, and C&W are next in line, followed by everyone else.
I would say this is pretty accurate, maybe Colliers should be Tiered a little higher though
Is this by pledge class?
Echoing what CRE said it's hard to make these kinds of rankings when asset types and market areas are huge factors. For instance, you're putting ARA, Moran & Co., and Berkadia at Tier 3 when they specialize in multifamily while groups like CBRE, JLL and C&W broker all asset types. At a minimum you have to specify asset type and market. The team strengths in brokerage vary so much it's hard to say that is the representation of the company when we're all hired guns.
The brokers at MM are not as well polished as Eastdill or HFF. They are your used car salesman type of people. With that being said, I know more people at MM pulling in 7 figures than at the top shops. I have no idea why but my guess is that these guys are like a sweatshop. They cold call like nobody else and keep pushing to make deals happen. They have a reputation for not being a formal and polished shop as I mentioned, but I guess it works for them. They also don't do institutional deals like the top shops, they stay in the mid-market or below range. Properties where there is a family that owns them or just some local doctors or lawyers that pooled their money together.
I had an interview that went well with M&M not long ago. The manager is waiting for me to get my license at this point. How do these guys succeed? Straight cold call 8-12 hours a day?
Off-topic:
How do broker fees typically work for these various sizes of properties? (I know how it's worked on my deals, but we've typically used internal/corporate people to sell.) Like, I'm assuming something like 3% fee for the selling broker on a $3 million retail strip building, and for like a $100 million apartment building I'd assume something like a flat fee of $400,000 or something like that?
Yes, your math is about right. As the price increases, you will typically see owners put a ceiling on their brokers commissions via lower basis point fees.
For a $100 million apartment building, the broker probably stated they could achieve that price in their BOV. The broker would probably ask for a 50 bps = $500,000. They might also have a clause in their agreement that states if they achieve a purchase price of $105 million, anything over $100 million will be calculated on a 2% fee. Total fee would be $600,000.
Smaller sized deals can be between 1%-4% of purchase price. Off-market deals will be lower than fully marketed deals.
Others can chime in as there is no standard and every broker offers a different pricing structure and it is typically kept a secret as they discount commissions more often than they would like to admit and if everybody knows about those discounts, then everybody will start asking for them. Typically, higher the sales price of the property, I have seen discounts on commissions. It is a sliding scale. On a 100M building, I have seen 1 percent commissions or even lower. My favorite story- Darcy Stacom- "the Queen of skyscrapers" lol, brokered the largest multifamily at that time in 2007- sales price was 5.4 billion. She would never share her commission, but it is a rumor that she got a .09 percent commission.
For large retail properties I've probably seen 40-50 bps on average, some deals as high as 70bps, never lower than 35 or so.
M&M is rough and extremely unprofessional. I wouldn't touch them with a ten-foot poll (in nyc). There are a lot of other smaller firms that I would say are on a higher tier than them.
Most of the teams, yes...but NNN Pro Group in NYC does an absurd amount of deals. Glen Kunofsky probably pulls in at least 7-10 million net to himself.
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