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.
Browse all interviews →
Transcript (14 segments)
H
Host0:00
And it's CEO Hessam Nadji joins us now. Hessam, welcome to the New York Stock Exchange.
H
Hessam Nadji0:06
Thank you. Thanks for having me on the program.
H
Host0:07
So great to have you here. So, what is the current state of the commercial real estate market?
H
Hessam Nadji0:13
It's one of improvement in multiple areas. First of all, we've seen amazing resilience economically against a lot of headwinds, the Middle East war, slowdown in the labor market. Nonetheless, job growth is still positive, which is really important for commercial real estate because that's the underpinning of demand for every property type, retail, office, multi-family rentals, and so on. The other good news, just in the last 2 days, we saw a drop in the rate of inflation related to energy prices coming down, which indicates a really positive track for inflation and interest rates when the war in the Middle East is settled. Now, I know tensions have re-escalated, and that might get postponed again, but the last 2 days data was evidence that once this war is behind us, we should get a lot more of a clear runway for the reduction in inflation, and therefore stabilization or reduction in interest rates, which is very important for commercial real estate investment transactions and financing. And then lastly, I will say that what's really favoring the industry is 2 and 1/2 years, almost 3 years of price corrections from the Fed's extreme tightening of financial conditions and the 500 basis point increase in interest rates in just, you know, 2 years or so, that really challenged valuations and trading activity. We're finally recovering from that, and the price corrections are bringing capital back into the sector.
H
Host1:41
And it's been a long road to get to this point. What have the past several years looked like in terms of momentum?
H
Hessam Nadji1:48
Well, it's very different by different property types. Retail, for example, has already gone through a massive repositioning because of e-commerce over the last 20 years and supply was essentially shut off and a lot of shopping centers became obsolete and had to reposition themselves to compete with e-commerce. Retail is back. It's more of an experiential product type. It's much more of a consumer foot traffic product type. Restaurant, bars, fitness and fun are the themes that are bringing retail back and it's doing really well, surprisingly well actually. Multi-family rentals are the only alternative when housing prices have skyrocketed, interest rates have skyrocketed and people can't afford to buy homes. So, we're seeing apartment demand also coming in very strong. Second quarter apartment demand was way above expectation and then of course the other story is return to office. We're almost at 90% daily attendance in office properties compared to the pre-pandemic levels. Almost 90% of where we were before the pandemic. It's been a long road of that coming back, but it's finally coming back.
H
Host2:54
And how do jobs numbers and the job market play into that return to office?
H
Hessam Nadji2:59
It's a significant indicator because of the fact that when companies expand or companies are growing, that is the first sign of the need for additional space in office buildings. We still have a long way to go before we, you know, we really see demand outpacing the current overhang of vacant space, but the recovery is now well underway. Again, being 90% of pre-pandemic levels. There is a lot of change going on because of AI. Because there's so much alternative ways that you can do a lot of the repetitive tasks that usually you would hire someone to do that is now being basically outsourced to AI in so many ways. So, the job escalation is going to be impacted by that. Nonetheless, just companies mandating a return to office so people can work together and there'll be more of a team environment than isolated virtual work is a very positive indication for office space.
H
Host3:56
And I understand you also see some momentum in the multi-family sector. Can you speak into that a little bit?
H
Hessam Nadji4:02
You know, the multi-family sector as I mentioned is benefiting from the affordability gap for sure. But another really important trend in multi-family is the 50% drop in new supply coming into the market this year. By next year, that'll be as much as 70% drop in new construction from the peak. There are a handful of markets that are really overbuilt. Phoenix, parts of Texas, Atlanta that are high-growth markets, but they put up too many units. Now that that construction pipeline is really slowing down, a lot of those markets should start to recover.
H
Host4:39
Where in the US are we seeing the strongest gains?
H
Hessam Nadji4:42
I would say that the, you know, the demographically favored markets such as the Southeast, the Carolinas, Nevada, still Arizona. Those are places that people are migrating to because of lower cost of housing and companies are relocating to because of lower cost of doing business and frankly favorable tax structures. Even though that slowed down quite a bit in the last year, year and a half, those states are still in favor from an investment perspective because they're attracting people and companies.
H
Host5:13
Hessam Nadji, CEO of Marcus & Millichap, thank you so much for joining us.
H
Hessam Nadji5:17
Thanks for having me on. It's great to be here.
