CALABASAS, CA—Having already established a formidable presence in multifamily with its Institutional Property Advisors division, Marcus & Millichap is expanding the IPA platform into office and industrial, GlobeSt.com has learned exclusively. Alan Pontius, SVP and national director of MMI's national office and industrial group, will serve as national director of IPA's office and industrial initiative.

"Over the years, our team has conducted business with numerous major private and institutional investors and by organizing our teams and brand within IPA, we aim to further enhance our major client services by combining our sales expertise with our industry leading research and capital markets capabilities," says John Kerin, president and CEO of MMI. Adds Hessam Nadji, senior EVP in charge of overseeing MMI's specialty divisions, "By creating the IPA division, Marcus & Millichap is positioned extremely well to bring together private capital and the institutional marketplace while serving the unique needs of each investor group. We are excited to build on our success with IPA by expanding into the office and industrial sectors."

Regarding the timing of the IPA expansion into office and industrial, "It's really two points coming together," Pontius tells GlobeSt.com. Those two points, he explains, are investor demand in both sectors and the evolution of MMI's abilities to meet that demand on both the institutional and private side.

Compared to multifamily, which has been hot for some time, and retail, which has rallied over the past couple of years, "office has been somewhat of a laggard," says Pontius. "You're linking improvement on the demand side with very limited expansion on the supply side. That bodes well for continued gains in performance in the office sector. Consequently, the timing for us to look at this strategy is very well lined up with continued strengthening in that sector."

On the other side of the ledger, "while it might be true that industrial is far more advanced in terms of both price recovery and investor perception, you still have incredible gains on the demand side, because of the continued expansion of online retailing," he says. "And even though you see gains on the supply side, a lot of those gains are in larger, big-box distribution formats," and centered mainly around three major distribution areas: Southern California, particularly the Inland Empire; Dallas; and Atlanta.

In the expanding realm of e-commerce, there are applications for smaller-capacity facilities, even if new ones aren't being built very often. "So there's still plenty of room in our view for continued gains in the industrial sector," says Pontius.

When it comes to serving the needs of investors in both office and industrial, "we as an organization have always been uniquely structured when it comes to merging private capital with institutional capital," Pontius says. "So as we expand our own service line and introduce this IPA strategy into the business, we are able to expand our private investor clients' access into larger, institutional-grade assets. At the same time, we're going to give institutional investors the ability to access private capital that is very capable of making the move into assets $20-million and over from their own buildup of wealth."

Furthermore, Pontius notes that institutions can have "a very narrow definition of what they consider a fit for their funds. So a lot of what institutional investors are looking to sell into the marketplace may not match up perfectly with institutional funds on the other side. Our positioning with the private investor can increase liquidity with a broader range of assets in the marketplace."

Naturally, the expansion of the IPA platform will mean an expansion of the team and market coverage. Pontius says the company will look to grow its presence both in markets it already serves and in those where it has less of a presence at the moment.