Marcus & Millichap Competition
Now Viewing Marcus & Millichap's competition in: Real Estate Brokerage and Management (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How does the company market its properties? - Local newspaper advertising is typical. In the residential market, referrals are important.
For commercial properties, what are typical lease terms? - Office and retail leases usually are either for 10 plus years, or three to five. Large commercial property owners may have 10 to 20 percent of their leases expiring each year. Typical central business district annual office rents are between $20 and $30 per square foot.
How have vacancy rates and rents changed in the company's properties in the past year? - Vacancy rates for office, industrial, and apartment properties vary from year to year.
How does the company deal with delinquencies in lease or rental payments? - During a recession, managers may allow tenants to stretch out payments to avoid losing tenants.
What types of tenants does the company try to attract? -
Competitive Landscape
The profitability of real estate management companies (which have mainly fixed costs) depends on demand for the properties they're associated with or the volume of transactions they handle, both of which are usually higher during periods of strong economic growth and can be negatively affected by a recession or by too much new construction. Large companies have only modest economies of scale and benefit mainly from better name recognition than smaller competitors.
Full Industry Overview For Real Estate Brokerage and Management
Business Challenges
CRITICAL ISSUES
Profitability Linked to Economic Cycles - Returns on real estate investment fluctuate with the health of the national economy. During recessions, the value of commercial real estate can fall 20 percent or more and the number of transactions decline sharply. Vacancy rates can change rapidly, with large regional differences.
Lack of Access to Capital - Because investing in real estate can be risky, capital to fund acquisitions or construction can be difficult to get. Real estate is often highly leveraged and illiquid. In down markets, equity in real estate projects can rapidly disappear, leaving lenders with sharply devalued properties. During the late 2000s recession, many banks had to be bailed out by the federal government because of bad real estate loans.
Industries Where Marcus & Millichap Competes
- Real Estate
- Commercial Real Estate Brokerage(primary)
