SAN FRANCISCO—While REITs are sensitive to interest rates, concerns about real estate trusts' vulnerability in this regard may be overstated, Marcus & Millichap's Hessam Nadji said recently. Appearing on a segment of CNBC's Halftime Report, the GlobeSt.com Thought Leader said there's likely to be “some interest rate volatility” this year, “and that's going to price into the REIT performance in the first half of this year. But it will not be significant, because the FFO growth, the rent growth and the occupancy growth are going to be a bigger story than interest rate movement.”

The “bigger picture,” Nadji said, is more important when looking at the prospects for REITs. “The asset class is yielding 5% to 7%, which is very competitive,” said the chief strategy officer at MMI. “We have demand outpacing supply by a wide margin, and improving fundamentals across the board.”

When the underlying assets are taken into consideration, said Nadji, “the outlook really calls for a continuation of demand exceeding supply in every product type we are tracking. So REITs in general are going to benefit. Also, they're very efficient operators on top of that.”

Nadji also discussed the share of investors' portfolios ought to be devoted to REITs and other commercial real estate firms, saying that “most investors appear to be under-invested” in the sector. He also shared his views on some of the REIT stocks that have performed especially strongly of late.

For the full video, click here. For all coverage of Marcus & Millichap on GlobeSt.com, including columns and insights from Hessam Nadji, click here.