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Thursday, May 26, 2022

Brokers’ Boss

Marcus & Millichap Inc.’s new minted Chief Operating Officer of the Western States Richard Matricaria is no stranger to the Calabasas-based real estate brokerage. Matricaria brings 20 years of experience to his new job – having served in various executive roles and overseeing a wide swath of territories, including Southern California and the North Los Angeles market. Last month, Marcus & Millichap announced that the veteran real estate executive was promoted to the position of chief operating officer for the western division alongside his colleague J.D. Parker’s ascension to the eastern division. Back in April 2019, the pair had already been named executive vice presidents, responsible for overseeing the company’s division managers and specialty directors as part of the leadership succession plan. “The vision behind this dual leadership structure is to execute the company’s growth plan more efficiently with expanded leadership bandwidth and the complementary skills of two highly talented executives,” Marcus & Millichap Chief Executive Hessam Nadji said in the June statement. Matricaria joined the company in 2000 and was a successful retail broker for several years before moving into management. He was key in building successful Florida offices in Orlando and Tampa, the latter of which became a top-performing office nationally. In 2016, he relocated to Chicago to oversee the Midwest division, which grew by 30 percent under his supervision. He has since relocated to the company’s corporate headquarters in Calabasas as part of his expanded responsibilities.Matricaria spoke to the Business Journal by phone while he was in Denver for a conference to discuss the road ahead for commercial real estate as business emerges from the constraints of the coronavirus crisis.Where is the commercial real estate market in the western U.S.? Which markets are looking good?Denver, where I am today, is a very hot market. Salt Lake City, same thing. We’re seeing even markets like San Francisco and Seattle, which were badly hit by the pandemic, investors have come back. We’re seeing investor activity pick up.

The whole state of Texas is hot. A lot of California investors have seen an opportunity to move their capital to Texas, primarily Dallas. Phoenix is very hot and under-supplied for a very long time. Investor activity is very strong.

The Vegas area got hit really hard with hospitality, but we will see it slowly come back as people get back on the road.

What have been the surprise markets to emerge from the COVID crisis?Boise, (Idaho), believe it or not. People coming out of San Francisco, Seattle and even Southern California have been moving their money up there. It’s one of the top ones in the country in the last 18 months.How would you characterize the San Fernando Valley as a real estate market?The SFV is a great market. Like a lot of markets, it’s dense. There’s so much capital-chasing deals. Overall, it’s pretty robust for a capital market. The challenges relative to the pandemic in terms of people going to work, commuting to work, it’s coming back. You have a less of an impact from commuters. The fundamentals of the market are there.Is there an equivalent to the Valley in other markets, other states?The San Fernando Valley is one of the more dense. I guess you can call it suburbs. There’s more stock, it’s much larger than any other market. It’s pretty unique. It’s a market unto itself. It’s the size of other smaller cities in the western U.S. L.A. is a massive market. New York is a massive market. You have the San Fernando Valley as big as some small cities. As a market, it’s a standalone.

The pandemic has occasioned a pivot from urban live/work/play to the suburbs. Where do you foresee this going in 2021 and 2022?I think the cities will come back. We saw people move out of the core of cities and into the suburban space, which affected the markets in the suburbs from the price standpoint. I think it’ll come back. I’m bullish on the city. Once COVID is a distant memory, people will slowly go back.What about the office market?From a work perspective, employers will work things out with employees in a case-by-case manner. They’ll do a hybrid one or two days a week or offer the option to work from home. You’ll have some employers who will want their employees to go to work at the office and I think that’ll be fine, too.In the multifamily market, has the eviction moratorium proven a disaster for building owners?The eviction moratorium will last until Sept. 30 now, but it increases reimbursements to landlords from 80 to 100 percent. It provides for reimbursement. It’s somewhat of an onset but it’s definitely still a challenge for owners. Our owners are underwriting that into the financials when they’re buying inventory, but the market is seeing pent-up demand, there are low interest rates, so it’s not affecting pricing. (But) from an operations standpoint, it’s still a challenge.Do you anticipate a so-called “eviction tsunami” once the moratorium ends?I couldn’t speculate beyond that. Owners will work with tenants when they can. They’ll do what’s smart and right for their tenants.What will happen for building owners when the eviction moratorium is finally lifted?I think it will propel the market further. The market is very good from an investment and sales perspective. A lot of these owners are excellent operators. They’ll be able to increase (their options) and I think it’ll be advantageous to them.Among the sectors of commercial real estate, industrial seems to have been the major ray of light during the pandemic-year gloom.

Industrial was propelled by the pandemic, given how retail was affected and the Amazon effect. So the cap rates dropped, occupancies increased. With the digital economy, it put last-mile (distribution) at a premium and those fundamentals are still pretty strong.With all of the Amazon leasing action in North L.A., do you feel that industrial is tapped out or is there more runway? We still have a lot of runway because there has not been oversupply. When you look at construction, it hasn’t kept pace with demand. … We will see e-commerce become more important to a variety of companies. Most smart retailers are sticking to a hybrid strategy just to remain relevant. You have retail transforming and a big part of that will be e-commerce.How do you enjoy working in Calabasas?I moved from Chicago so you can’t beat the weather out here. I’m really enjoying it and my wife and I are enjoying California.What do you love most about your  new role and how does your skill set play into it?I’m really just enjoying a great opportunity to contribute and make an impact on a wider scale and cross-collaboration across our organization. And ultimately that translates into better service for our clients.

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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