About Hessam Nadji
Hessam Nadji, CEO of Marcus & Millichap, appeared on NYSE TV and CNBC in July 2026 to discuss the commercial real estate market. He stated that the market is showing improvement, citing economic resilience and positive job growth as underpinning demand across property types. Nadji noted that office daily attendance has returned to nearly 90% of pre-pandemic levels, describing the sector as "quietly gaining momentum." He also said that retail has "come back" as an experiential product type driven by restaurants, bars, and fitness, and that multifamily demand is strong due to a housing affordability gap that keeps people in rentals. Nadji attributed a 50% drop in new multifamily supply in 2026 and a projected 70% drop by 2027 to high interest rates and construction costs.
Nadji said that price corrections of 15% to 30% on average across property types, with office seeing the most severe adjustment, are bringing capital back into the sector. He described the market as having "recalibrated" by 2025 after a severe shock from the Federal Reserve's 500-basis-point rate increase. Nadji stated that investors are responding by focusing on specific asset and market strategies rather than counting on interest rate reductions, and that transaction volumes are picking up as more inventory comes to market. He identified demographically favored markets such as the Southeast, Carolinas, Nevada, and Arizona as areas attracting investment due to migration and lower costs.
Source: AI-verified profile updated from Hessam Nadji's recent appearances.
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Transcript (8 segments)
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Interviewer0:00
For more on what this all means for the housing industry, let's bring in Hassam Naji, CEO of real estate brokerage. Marcus and Milichap, thank you for joining us today on this Friday. How are you handicapping all of this?
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Hessam Nadji0:13
Well, the president is right on that interest rates really drive the housing market and commercial real estate in general as one of the main factors along with job growth which creates demand. And we came into the year expecting interest rates to be stable or coming down to some extent. And of course due to a variety of factors including the war in Iran, we have seen the reverse of that with inflation resurging. So you would have expected by now a more stabilized interest rate environment and a more accommodative environment and the new Fed chair I think is going to have his hands tied for a while. So our clients are responding by looking at their real estate more closely, having more specific strategies around the asset and the market itself, and therefore not counting on the interest rate reduction factor as a catalyst to do transactions. So we're actually seeing transaction volumes pick up and more capital coming into commercial real estate. On the housing front, even if the housing bill is approved and made into law, it's really not going to have a significant impact on housing affordability, which is at an all-time low, given the fact that the institutional owners that were targeted to reduce their influence only make up around 3% of the entire marketplace. So, interest rates and home prices are the two factors that are going to drive affordability. We're seeing very strong apartment rental demand because people are staying in the rental market a lot longer. They can't afford to buy homes.
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Interviewer1:54
So, let's say that interest rates do go down to the point where it unlocks some more supply. Do you see that happening? I mean, is that something that you believe is in the realm of possibility when we've spent years in this kind of bottleneck?
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Hessam Nadji2:10
Given the readings on inflation and what's in the pipeline in terms of inflationary pressures that haven't even shown up in the numbers yet, including by the way the increasing cost of housing and shelter, I don't anticipate interest rates to go down in any meaningful fashion and therefore the affordability on the housing side will continue to be a major challenge because you also have to remember the cost of building a home or commercial real estate property has skyrocketed. Land prices, materials, labor cost, and therefore it's just becoming harder and harder to pencil out new supply and balance that with what people can actually afford. So the supply of housing that is being introduced is at a very high-end level that the average American under middle class can't afford. In fact, one of the factors we're tracking on the multifamily side is about a 50 to 70% decline in new construction starts. So, there's going to be even less rental supply coming into the market over the next 2 or 3 years because of the pullback in new construction. Most of that is driven by high interest rates and a very high cost of construction.
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Interviewer3:24
Yeah. So, the inflation kind of wielding its way through multiple aspects of housing. What about on the commercial real estate side? Three years ago that was very much in focus as work from home changed the dynamic for office. Do you feel like all of those fears were unfounded and that it's found a more stable footing?
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Hessam Nadji3:44
The fears were not unfounded because with a 500 basis point increase in the federal funds rate in just a couple of years, that shock to valuations and shock to the balance in the market was pretty severe. We saw the sort of bottoming effect of that in 2023, some recovery in 2024. By 2025, the market had recalibrated. There's been a lot of price adjustments. Prices have come down on average anywhere from 15 to 30%, depending on the property type. Office buildings have seen the most severe price adjustment, of course, given the stress on the office marketplace. And what's happened now after a couple of years of these recalibrations because of lower prices and some pressure to release pent-up demand. A lot of owners that had to sell property due to maturing loans, operational issues, waited and waited for interest rates to come down. They never did. So now they have to bring new product to market. We're seeing more inventory on the market and that's why capital is coming back. So the real estate itself is overshadowing the fact that interest rates are actually much higher than we expected at this point in the cycle, but investors are seeing the opportunity to get in because prices have come down.
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Interviewer5:05
Really good point there. Uh Hassan, thank you so much. Appreciate your time.
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Hessam Nadji5:09
Great to be with you.
