Greetings and welcome to the Marcus & Millichap’s Third Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve Swett of ICR. Thank you, you may begin.

Thank you, operator. Good afternoon and welcome to Marcus & Millichap's third quarter 2014 earnings conference call. With us today are Marcus & Millichap’s President and Chief Executive Officer, John Kerin; Chief Strategy Officer, Hessam Nadji; and Chief Financial Officer, Marty Louie. Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward-looking statements. Words such as may, will, expect, intend, plan, believe, seek, could, estimate, judgment, targeting, should, anticipate, goal and variations of the these words and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors including but not limited to general economic conditions, commercial real estate market conditions including the recent conditions in the global markets, and in particular the U.S. Fed markets. The Company’s ability to retain and attract transaction professionals, the Company’s ability to retain its business philosophy and partnership culture, competitive pressures, the Company’s ability to integrate new agents and sustain its growth, and other factors discussed in the Company’s public filings, including the risk factors included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 2014. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The Company undertakes no obligation to update any forward-looking statement whether as a result of new information, future events, or otherwise. In addition certain of the financial information presented in this call represents non-GAAP financial measures. The Company’s earnings release which was issued this afternoon and is available on the Company’s website, presents reconciliations to the appropriate GAAP measures and an explanation of why the Company believes such non-GAAP financial measures are useful to investors. Finally, this conference call is being webcast. The webcast link is available on the Investor Relations section of our website at www.marcusandmillichap.com along with a slide presentation you may reference during the prepared remarks. With that, it’s now my pleasure to turn to call over to Marcus & Millichap’s President and Chief Executive Officer, John Kerin. John?

Thank you, Steve. And thank you for joining us today to hear our financial and operational results for the third quarter of 2014. I will begin today’s call with an overview of the Company’s performance and a review of our operational highlights for the third quarter. Hessam Nadji, our Chief Strategy Officer, will follow with an update on market conditions and Marty Louie, our Chief Financial Officer will conclude by providing additional details on the Company’s financial results. We will then open up the call to your questions. Let me begin with a review of our year-to-date results which continued to reflect strong year-over-year growth across the Board. Year-to-date revenues increased 39% totaling approximately $400 million with realty brokerage commissions up over 42% in the same period last year while our financing fees grew by 19.7%. Year-to-date net income was $33.1 million, up approximately 96% from the prior year. Our year-to-date adjusted EBITDA was $63.1 million, which is approximately 72% higher from the same period last year. Along with an adjusted EBITDA margin improvement to 15.8% from 12.8% a year ago. Year-to-date sales volumes totaled $23.2 billion, representing an increase of 44% compared to the same period in 2013. Over the past nine months we closed 5,523 transactions up 18.3% over the prior year period. The high rate of growth in our dollar volume is a result of a few unusually large transactions we closed this year. Clearly the momentum experienced in the first half of the year has continued into the third quarter. During which we met or exceeded our goals for nearly all of our key metrics availed to our performance. These include growth in a number of sales professionals, total number of transactions and sales volume. At the top line, third quarter revenue of $150.9 million increased…

Thank you John and good afternoon. My comments today are intended to provide an overview of the commercial real estate market and are not necessarily specific to Marcus & Millichap. The third quarter marks another period of expansion for the U.S. economy, rising property optimization in virtually every segment, widely available financing options at attractive rates, and solid increases in commercial property sales. At a time of increased geopolitical tensions and slowing economies in Europe and Asia, the U.S. stands out as an outperformer which in turn is keeping our interest rates low. Within the U.S. commercial real estate yields and improving property fundamentals combined with this favorable outlook for rent growth continued to spur capital flows and price increases during the quarter. In fact the commercial real estate and investor sentiment index which we published with national real estate investor for the past 10 years remained near its all time high during the third quarter. 70% of investors who participated in the survey expect more improvement in occupancies and rising values and 60% plan to increase acquisitions in the next 12 months compared to a 50% a year ago. This positive sentiment is not surprising given the underlying numbers for the first nine months of 2014 which I will now highlight. We added 2 million jobs bringing total employment above its prior peak by 1.1 million jobs. Unemployment was up little 6% for the first time since July of 2008. Inflation is rising modestly and remained below the Fed’s target partially helped by falling energy prices. This gives the Fed plenty of flexibility to remain accommodated. Occupancies for retail, industrial, hotels, seniors housing, and self storage properties hit their highest levels in at least six years. Apartment occupancies rose 80 basis points to 96% thanks to strong renter demand…

Thanks Hessam. Now I would like to discuss our third quarter 2014 numbers in more detail. Total revenues in the third quarter of 2014 were $158.9 million compared to $112 million for the same period in the prior year with an increase of nearly 35%. This increase in total revenues was primarily driven by increases in our real estate brokerage commissions which grew to $148.2 million from $101.8 million for the same period in 2013 for an increase of nearly 38%. This increase was driven by both an increase in the number of investment sales transactions as well as an increase in the average commission size, partially offset by a slight decrease in the average commission rates during the quarter. The average commission rate was impacted by one large transaction during the third quarter of 2014 for which the commission rate was lowered in our typical transaction, as larger transactions generally earn a lower commission rate. Revenues from financing fees generated principally by MMCC increased to $7.9 million from $6.8 million in the third quarter of last year for an increase of nearly 16%. Other revenues of $2.8 million were down compared to $3.4 million last year driven primarily by a decrease in referral fees from other real estate brokers. Clearly our platform and strategy have produced strong growth metrics in the third quarter and over the past nine months end market conditions appear supportive of continued positive results as we entered the balance of the year. Now let me provide some color on the revenue drivers within the real estate growth rates, which generate more than 90% of markets -- total revenue in the third quarter. For the third quarter, the total sales volume was $7.9 billion up approximately 79% and $4.4 billion for the same quarter of the…

Thank you. (Operator Instructions). Our first question comes from the line of Mitch Germain of JMP Securities. Please proceed with your question.

Good afternoon, great quarter guys.

Thank you

Is there any way to quantify this one large transaction, maybe just kind of provide some perspective versus kind of what your average transaction size has been the last couple of quarters?

Yes, Mitch this is Marty. Well for this particular transaction for confidentiality purposes we really can’t give too much color on it. But what I can tell you is that our average commission rate in terms of fees would have been comparable for both Q3 and year-to-date, if you normalized it.

Okay, that’s kind of what I was looking for, great. And then with regards to your hiring effort, it seems like it is the Northeast kind of the geography where you’re spending a lot of your time?

This is John, Mitch. We are spending time all over the board. I mean we have 40 plus managers out there, we have a team of recruiters out there. So we’re hiring across the board. We happen to have a push in the Northeast because we have space that we expanded into and that’s why we talk about it a little bit more because that’s probably where we have the largest expansion opportunities.

And any new office openings on the horizon?

Well we opened up the smaller office in Ventura which is right near where we are right here in Los Angeles. And we’re always looking to open up smaller offices across the country in our mid market program. But nothing real, nothing on the horizon for larger offices.

Great, last question from me, any thoughts about either a quarterly or possibly a special dividend?

Yes Mitch, Marty again. This is something that the Board will continue to review in terms of our distribution policy. But I think you have to keep in mind with our strong balance sheet and our assets to capital, it is really a true advantage of our business and it gives us flexibility to consider our growth as we continue to look at our strategy going forward.

That’s it for me.

Alright, thanks Mitch.

(Operator Instructions). Our next question comes from the line of Phil Stiller with Citi. Please proceed with your question.

Hi, thanks for taking my questions. Just going back to the large transaction I think, I heard excluding that the average transactions size that was still up 16%, just wanted to check that number and if so if that’s right what drove that upside?

Yes, I mean it’s just the fact that we continue to do larger transactions and that 16% is correct on a normalized basis. Go ahead.

Is that out of line in terms of what you guys are seeing in the market or is it just a mix effect of your move at market?

Hi, there Hessam here. I feel good to be with you. On the market side we’ve seen increases on both the smaller transactions and a larger transaction. For us it’s more of a function of the fact that our more tenured agents are doing more transactions and because they are more senior they are gravitating towards the larger deals. But from a business strategy point of view of course just to reiterate, our focus is $1 million to $10 million segment of the marketplace. It’s really a function of a lot of our senior agents now starting to do larger transactions.

Okay, that’s helpful. And as we go through the slides for some that you laid out, it seems like you have a good fourth quarter from a market perspective, we might be above the 2006 and 2007 levels in terms of deep transaction activity, how do you guys think about that I guess in terms of your ability to sustain growth in I guess particularly aging productivity in this type of market?

Sure I’ll address that, Hessam here. From the total number of transactions you are right. But if you really look under the surface you’ll see that the total transactions compared to the prior peak really are skewed by single tenant in these properties and smaller apartments in the areas that we’re doing a lot of market share expansion and this platform expansion including particularly office, the $1 million to $10 million office market on the specialty segments, all of those segments are quite away from the peak. And far more importantly, even within small apartments and single tenant in the least, once again our market share of around 7.5% to 7.7% in that $1 million to $10 million range, the largest portion of the market is still low enough to offer us plenty of growth opportunities from share gain. And by just adding more capacity to what we’ve already put in the place in terms of our footprint. So we are not very concerned at all regarding where the market is versus peak because as we look at our own growth opportunities and the strategies we have in place to execute the growth opportunities, we really see a lot of growth room ahead.

Okay, great. And I guess last question from me. Marty, I know you mentioned third quarter might be a bit larger from a seasonal perspective than normal. I guess help us understand what is normal given kind of the moving part say we’ve had over the last couple of years from a quarterly perspective.

Yeah, so again first quarter is 15%, 17%, 20% of our total year of sales. Second quarter is anywhere between 24% and 25%. Third is typically 25% to 26% and fourth quarter it makes us balance. So in terms of third quarter, it is my belief that we are on the high side of that. So that’s where we are.

Great, Thank you.

Thank you (Operator Instructions). Thank you, we have no further questions in queue at this time. I would like to hand the…

Thank you, operator.

I am sorry.

Again thank you everyone for joining our call today, and we look forward to speaking to you again after the fourth quarter. Have a good day.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.