Next Generation of Investors Is At the Table

LOS ANGELES—“I enjoy being optimistic,” said Hessam Nadji, CEO of Marcus & Millichap, to open his keynote speech at RealShare Los Angeles. Nadji took a much more positive view of the market than Ethan Penner, who spoke before him at the opening of the conference. Looking at changing demographic patterns and demographic diversity, Nadji said that the population in America “is a great reason for growth in every industry.”

The population today includes both the baby boomers and the millennial generation, two large demographic groups operating in the economy at the same time and creating more opportunity. “We have tremendous growth in a generation that is as big as the baby boomers, says Nadji. “That is unheard of anywhere else in the world.” While we do have an aging demographic like other countries, we are filling in the middle and the bottom, he said, creating demographic diversity that will be an economic driver.

Today, wealth is already starting to shift to the younger generation, and Nadji says that young investors are at the table when his firm is negotiating deals. “We have focused on the private investor, and that is our core business,” he said. “Today, the active player is the children of those principals. The next generation of investors is at the table today. Those are our new clients. That wealth transfer is huge.”

Another component of his healthy economic view is the stable job growth in major markets across the country. “Markets are putting up job numbers that are unbelievable,” explained Nadji, pointing to a chart that shows Dallas, Atlanta, Los Angeles and New York as the major creators of jobs. While the pace of job growth is still relatively slow, about 1.7%, versus the 3% average following most other downturns, Nadji says that we have not overheated the economy by focusing on slow growth. “The good thing is that we haven't overheated the economy. We have an accommodative Fed that is trying to recover the values lost in the great recession. The slow growth is frustrating but has its benefits.”

He agreed with Penner that the interest rates would likely hover in the 2% to 4% range that they have historically, but did have one concern: supply. With these large populations operating in the economy simultaneously, he said, “we may have an acute shortage of supply.” In terms of asset classes, Nadji had a positive outlook, and said that while valuations are strong, we are not in a bubble because of the strong underlying fundamentals. “The 2007 peak was a temporary phenomenon,” he said. The 2016 peak was much healthier.”

LOS ANGELES—“I enjoy being optimistic,” said Hessam Nadji, CEO of Marcus & Millichap, to open his keynote speech at RealShare Los Angeles. Nadji took a much more positive view of the market than Ethan Penner, who spoke before him at the opening of the conference. Looking at changing demographic patterns and demographic diversity, Nadji said that the population in America “is a great reason for growth in every industry.”

The population today includes both the baby boomers and the millennial generation, two large demographic groups operating in the economy at the same time and creating more opportunity. “We have tremendous growth in a generation that is as big as the baby boomers, says Nadji. “That is unheard of anywhere else in the world.” While we do have an aging demographic like other countries, we are filling in the middle and the bottom, he said, creating demographic diversity that will be an economic driver.

Today, wealth is already starting to shift to the younger generation, and Nadji says that young investors are at the table when his firm is negotiating deals. “We have focused on the private investor, and that is our core business,” he said. “Today, the active player is the children of those principals. The next generation of investors is at the table today. Those are our new clients. That wealth transfer is huge.”

Another component of his healthy economic view is the stable job growth in major markets across the country. “Markets are putting up job numbers that are unbelievable,” explained Nadji, pointing to a chart that shows Dallas, Atlanta, Los Angeles and New York as the major creators of jobs. While the pace of job growth is still relatively slow, about 1.7%, versus the 3% average following most other downturns, Nadji says that we have not overheated the economy by focusing on slow growth. “The good thing is that we haven't overheated the economy. We have an accommodative Fed that is trying to recover the values lost in the great recession. The slow growth is frustrating but has its benefits.”

He agreed with Penner that the interest rates would likely hover in the 2% to 4% range that they have historically, but did have one concern: supply. With these large populations operating in the economy simultaneously, he said, “we may have an acute shortage of supply.” In terms of asset classes, Nadji had a positive outlook, and said that while valuations are strong, we are not in a bubble because of the strong underlying fundamentals. “The 2007 peak was a temporary phenomenon,” he said. The 2016 peak was much healthier.”