Justin West, First Vice President / Regional Manager, Marcus & Millichap
Justin West, vice president and regional manager of real estate brokerage and advisory firm Marcus & Millichap, sat down with Invest: to discuss the factors impacting Central Florida’s commercial real estate landscape, how the region has adapted to growth in the past decade and the company’s priorities looking ahead.
What have been Marcus & Millichap’s most significant achievements in the Greater Orlando region in the past two to three years?
Marcus & Millichap has grown significantly in the last two years in the Florida marketplace. This is a testament to our systems, and the training and education of our agents. Our agents continue to be ranked No. 1 in the Central Florida marketplace, with market domination in retail, office, industrial and multifamily. We have done some of the biggest transactions and continue to be ranked among our peers as the No. 1 investment team in Central Florida.
What trends are you observing in the Central Florida market?
In Central Florida, we are seeing a significant impact of in-migration from other states into our marketplace, even before COVID. Though, we have seen an enormous population influx post-COVID. It is benefiting not only the investment portfolio but also the local economy through a larger opportunity for labor deployment, strong job growth, development, and more. Even though some of our colleagues in states throughout the Union are pulling back on development, Central Florida continues to grow its development pipeline. We still have a significant construction pipeline ahead of us over the next 18 to 24 months. There is certainly a positive trajectory happening as a result of population and employment growth in our marketplace.
The biggest trend I have seen over the last 20 years is that Orlando has grown up as a city. We are no longer just a hospitality-driven market. Of course, we are hospitality-driven; however, there are major employment silos within the Central Florida marketplace, such as strategic defense. Companies like Lockheed Martin continue to grow and have a significant impact in the marketplace. Biotech is seeing growth as well. Our region is becoming a hub for innovation. We are no longer the house of the mouse. There are plenty of other opportunities outside of hospitality and tourism.
How do these trends influence investment decisions?
Decisions are made based on demographic and geographic shifts happening within a particular region. Ever since I first got into the business, I was told many years ago to follow the housing and its development. Retail, office, industrial, hospitality and other sectors will show up following housing. When you are talking about this influx of population growth over the past five to 10 years in the Central Florida marketplace, it only makes sense to have multiple aspects throughout the region growing as small cities within cities. The urbanization of Central Florida is vast. Orlando used to be a local investor’s paradise, whereas now we have investors from Miami, New York, Chicago, L.A., Texas and South America deploying a significant amount of capital into the marketplace as a result of our employment, population and pro-development growth.
How have technological advances in the commercial real estate market changed Marcus & Millichap’s approach and informed the market of the future?
Tech has a big impact on efficiencies within the commercial real estate market. I do not believe we have seen the vast array of technology enhancements that we are going to be seeing over the next 10 years in commercial real estate. This industry is still and will continue to be a complicated decision-making process. It is not just about whether or not a building fits the emotional aspect or the financial aspect. There are real and human complications going into the decision-making process of commercial real estate investment. One of the things we have seen as a positive trajectory that Marcus & Millichap is on the forefront of are things like data analytics, where we are using data to assist our clients in making their investment decisions. Marcus & Millichap has proprietary systems of information that allow us to use those data analysis tools to provide expertise and inform decisions every step along the way.
The future of technology in commercial real estate is going to be one of efficiency, not of eliminating the broker. You are never going to be able to eliminate the broker. The efficiencies, though, will be key for companies to continue to grow. The efficiencies you will see in commercial real estate will be transactional, streamlining processes, such as title, document preparation, property condition analysis and more. Brokers inherently are there to create and provide value, and to be able to articulate how a client can take one asset class and turn it into a different asset class to grow their wealth. You can’t replace that advice.
What are your top priorities for the next few years?
The top goals of Marcus & Millichap Orlando are continuing to grow our operations here, as we have been doing over the last 10 years. I anticipate hiring another 10 to 15 agents in the Central Florida marketplace and to grow in our market by 50% to 60% on a year-over-year basis. I would like to see us get even more involved in the community’s local associations and initiatives. As this market continues to change, Marcus & Millichap will continue to grow with it. We anticipate that we will remain No. 1 in the Central Florida marketplace in investment sales, and we will continue to capture market share. Right now, we are at about 17% market share, and I expect that to be at 25% or 30% in the next few years.
