SAN FRANCISCO—Following up on a recent Marcus & Millichap (MMI) Investor Sentiment Survey, which found that investor confidence in commercial real estate has reached an all-time high, the firm’s Hessam Nadji was asked whether the momentum could continue with interest rate worries looming. “Yes, for a variety of reasons,” the GlobeSt.com Thought Leader told an interviewer on CNBC Worldwide Exchange this past Monday.
The net gain of three million jobs above the pre-recession peak is one important factor, said Nadji, chief strategy officer at MMI. During that time, “we’ve seen demand for commercial estate grow, starting with apartments and then broadening to pretty much every sector, including brick and mortar retail as well as the niche sectors.”
Underpinning this widespread demand, Nadji told CNBC, is the fact that “the economy has done so much better than expected” over the past 18 months. While higher interest rates will make investors pause to think about valuation, “we don’t anticipate that interest rates will do anything radical over the next 12 to 18 months, giving the market plenty of time to adjust between the valuation on the real estate side and the cost of debt.”
Nadji also provided insights on where the commercial real estate hot spots are, the effects of the energy sector’s recent challenges on the market and the veracity of investor sentiment as an economic indicator. For the full video, click here. For all coverage of Marcus & Millichap on GlobeSt.com, including columns and insights from Hessam Nadji, click here.