SAN FRANCISCO—The question of whether we'll soon see interest rates increase—and how quickly they'll go up—is “the most important question we're asked by our clients,” Marcus & Millichap's Hessam Nadji said on CNBC last week. The GlobeSt.com Thought Leader said that as far as commercial real estate is concerned, any rise in interest rates would be balanced by continuing improvement in fundamentals.

"If interest rates are rising—as they appear to be positioning themselves to do next year, because of better job growth and because of some inflation coming back into the system given the gradual fall in unemployment—that's basically showing us an offsetting factor against higher interest rates,” MMI's chief strategy officer told interviewers during a segment of CNBC's Worldwide Exchange. The reason, he said, is that “it's the better economic conditions that are generating the reason for interest rates to be higher.”

When interest rates go up very quickly, without an accompanying improvement in employment growth, “that's when we typically see at least a temporary market adjustment,” said Nadji. “We're not anticipating that because there's very little inflation pressure, especially given lower energy prices and the stronger dollar, which are very deflationary.” Notwithstanding the more hawkish stance the Federal Reserve appears to have assumed lately, “I think the Fed still has plenty of flexibility, and even when interest rates rise, they should be pretty well balanced with better job growth next year.”

Nadji acknowledged that the market overall remains “very bifurcated” with regard to recovery from the downturn. Multifamily came back first, while office's recovery has lagged, with vacancy still above historical norms at 15% nationally.

However, in terms of positive absorption in the office sector, “we've burned through the excess space that existed three or four years ago,” he said. “So going forward, even if job growth stays at current levels, we should see a lot more translation of job growth into office space demand.”

Nadji also put the recovery of individual property sectors into a broader context, saying that the underlying driver has been the acceleration in job growth. For the full video, click here. For all coverage of Marcus & Millichap on GlobeSt.com, including columns and insights from Hessam Nadji, click here.