Global business news twenty four hours a day at Bloomberg dot com, the radio plus mobile LAP and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Pelotondal. The SMP NEZDAK halls surging at or near the best level of the day, and we're brought to you by National Realty Providers of one hundred percent satisfaction guaranteed New York City Realty the investments see them
at n r i A dot net. Now let's head right over to the first word breaking news desk for today's afternoon call. Here she is Sasha the Money. Good afternoon, Charlie. As you mentioned, the main US averages are holding strong in the green heading into the weekend. Small cap six hundred up at one point five percent, US tenure yield up at five point three percent. Eight out of ten SMP sectors are higher, led by financials. Utilities led to
the downside down one point three percent. Dow transfer It's rise a hundred and forty three points, nasdag Bio takes a little changed, and the VIX is down by eight point nine percent. Dow Leaders to the upside include Mark JP, JP, Morgan Chase, and Goldman Sachs. Losers include Verizon Communications, Procter and Gamble, and Coca Cola Bristol Myers. Squib plunged as much as eighteen percent today, most since two thousand and two after non small cell lung cancer trial of up
Divo didn't meet endpoint. EO G resources up as much as seven point eight percent after the company said it plans to boost drilling without spending more. Live from the First Word Breaking news desk. I'm Sasha Damuni Charlie. Alrighty, thank you very much, Sasha Damony into year Live breaking news over your Bloomberg Tip Squawk s q U a w K on your terminal. I'm Charlie Pellett. That's a Bloomberg business flash. You're listening to Taking stock with Kathleen
and Pim Fox on Bloomberg Radio. The shares of Marcus and Millichat they are hire today by more than five percent after reporting quarterly results that exceeded analysts estimates. Here to tell us more. As the President and the chief executive of Marcus and Millichap, Hassan Naji Hassan, thank you very much for being with us. Sam thanks for having me on the program. All right, let's begin by taking a look at the thirty three billion dollar real estate
financing company that is Marcus and Millichap. Tell us a little bit about the business in the last quarter. We'll get to the next quarter in a second, because I
know you've got some cautionary thoughts about that. Sure, Just to give some context from the commercial real estate investment marketplace, UH really is dominated by private investors of all commercial property sales in the United States, and the last year have have been in the one to ten million dollar really the microcap segment that are dominated by high network individuals,
small partnerships, and then local investors. Our company specializes in brokering these assets and where the largest firm in the United States with about eight offices and specialists who focus only on this specialized niche UH. And we have some larger clients, institutional clients that do the larger transaction and
they make up the other sevent of the business. So for US investor sentiment and the longer term tendencies for private investors to have personal drivers like death, the worst partnership breakups, and other financial aspects of their lives becomes a more important ingredient than than just the economic trends or quarterly swings. Uh So, the what where the market has been over the past few years has been in
a very rapid recovery post the financial crisis. Of course, commercial reality yields, which are in the five seven percent range, are still attracting a lot of capital to the sector. And uh this time around on like other cycles, commercial realty is not being over built. Uh The the discipline we've seen in the marketplace, both imposed by lenders and by developers compared to other cycles, has really kept the
market very, very healthy. Now, having said that, the market is in a transition from this rapid growth that I just talked about over the last five years in sales velocity and dramatic improvement in vacancies, dramatic improvement in rent into a more of a slow growth environment just because number one, the pricing has gone up quite a bit. Number two, there has been a lot of psychological effects in this year so far, in the first half of
the year that have created some caution among investors. So shales so far this year in the marketplace have been relatively flat compared to the rapid growth that I talked about it over the past few years, and for us, our firm is really focused on market share increases and market coverage and growing by headcount and productivity. And that's why we were able to exceed the market's performance by showing a nine percent revenue game over the first half
off and about a four percent earnings game. And that's that's sort of the perspective one where we are and where the market is. Well, we're just looking at your to date highlights for the company's sales volume right now up about sixtent transaction closings higher by six correct, Yeah, So I was just gonna say revenue by transaction size as well. You've got a nice sweet spot sweet spot of the of the market exactly. We're so well aligned with that of sales that was in the one to
ten million dollar range. Uh, and we're the dominant brand with a lot of room to grow in that segment. And that's what's really encouraging for us in terms of our long term plans. Looking in the short term, there is a lot of caution in the marketplace. Lenders are being very careful and therefore transactions are taking longer to market, longer to close, and even though that affects the short term sales velocity and slows everything down over the long term.
We think that's constructive because is it's eliminating or let's say, at least reducing the risk of overbuilding, and it's reducing the risk of over leveraging, which are really the two ingredients that typically disrupt good expansion cycle for commercial real estate. Well, I note that for example, occupancies have been rising as well as construction trends. They remain favorable for multi family, retail, office as well as industrial exactly, tell us a little
bit about commercial real estate yields. Are they still compelling? Well, Pam, that's the that's the bottom line is that in this low interest rate, low yield environment, when you look around alternative investments and where where investors can look for some reliable yield commercial real estate depending on the quality and depending on the market. Of course, it's a broad statement, but the averages show of five to seven percent yield
going in yield on the asset class. Now, if you're appetite for risk is higher, and you can invest in let's say, a hotel property or a shopping center that can be turned around with we tenanting and some work that you can do to add value to it. Those yields can be much higher than this general range if your appetite for risk is not so strong and you'd
rather have more of a of a lower risk income yield. Uh. There's plenty of appts, particularly apartments, and a market where the yields are in the three to four present range, but there's hardly any product being built, so there's a very little or supply risk. We gotta we gotta leave it there. I'm sorry, has some Naji. He's the president, the chief executive of Marcus and Millichap. The shares are higher by more than five percent. This is Bloomberg coming
up on taking stock. We're going to take stock of the campaign for president, more on Hillary Clinton and Donald Trump as he unveils his economic team. That's next