Marcus & Millichap, Inc. (MMI)

Marcus & Millichap CEO sees hope for commercial real estate

The commercial real estate sector had a rough year in 2023 compounded by the regional bank shakeup. The sector has had to adapt to surging mortgage rates, volatile markets, and changing work setups for office employees. Commercial real estate could still bounce back on stabilizing certainty in markets and potential interest rate cuts by the Federal Reserve. Marcus & Millichap (MMI) CEO Hessam Nadji joins Yahoo Finance to discuss why he believes the "worst of it" is behind the commercial real estate sector and why he believes investors should be cautiously optimistic going forward in the sector. Nadji affirms his stance: "As interest rates either settle or start to come in, either one by the way, the industry doesn't need interest rates to come in that much to basically get going again. It's the variability from week-to-week of where the interest rate movement is going to be that's creating an obstacle for the business. Once that happens and the price adjustments continue, I don't think we're done... seeing the full effect of the interest rate shock. I think we're more than halfway there. So within the next couple of quarters, we think that price discovery will have run its course and there will be more certainly related to revaluing commercial real estate in this higher interest rate environment. And that will bring a lot more activity to the market. So is the worse is it of it behind us? Yes, I'm confident that it is." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino