2023 was a tough year for the commercial real estate sector, made worse by local bank restructuring. The industry has had to adapt to rising mortgage rates, volatile markets, and changing employee work patterns. Commercial real estate could still recover with stabilizing market certainty and the possibility of lower interest rates from the Federal Reserve.
Marcus & Millichap (MMI) CEO Hessam Nagy joins Yahoo Finance to share why he believes the 'worst is' behind the commercial real estate sector and what investors are looking forward to discusses why he believes we should be cautiously optimistic about the sector's future.
Mr. Nagy remains firm in his position. “Interest rates will either settle down or start rising, but either way, the industry doesn't need rates to rise that much to basically get back on track. It's a week-to-week change.” If that happens and the price correction continues, I don't think this is the end of the world…We don't see the full impact of the interest rate shock.'' I think we are over half of our goal. Therefore, we believe that within the next few quarters, price discovery will come full circle and become more relevant as it relates to commercial real estate revaluations in this high interest rate environment. “It brings more activity to the market. So will things be even worse after us? Yes, I'm sure it will be.”
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Editor's note: This article was written by Nicholas Jacobino
