Why Hessam Nadji Says Commercial Real Estate Is Entering A New Phase Article originally posted on Globe St. on July 31, 2026 Marcus & Millichap CEO Hessam Nadji says commercial real estate is moving into a new phase of activity as three years of price corrections, loan maturities and pent-up demand push more properties to market, even with interest rates higher than many investors expected. He told Bloomberg Radio that this next leg of the cycle is defined by a wide spread in risk and reward across property types and submarkets, which is creating both stress and opportunity for investors willing to be selective. Risk And Reward Diverge Across Property Types Nadji said investors must be clear about strategy because the opportunities in today’s market differ sharply between assets, even within the same city. He pointed to the contrast between older Class C office buildings “trading 30 cents on the dollar” in one submarket and stronger properties just down the street in neighborhoods with job nodes and more attractive demographics. That divergence is showing up across sectors. Nadji said the “older stock of office buildings and even multifamily apartment buildings [and] shopping centers” is not in favor in an environment where interest rates have risen instead of fallen, while higher-quality assets are capturing capital. For investors, he framed this as “the beauty and the peril of commercial real estate” because the industry offers a broad spectrum of risk and potential reward from hotels to multifamily. Flight To Quality And The Return Of Retail Safety-focused, lower-yield investors are moving toward quality and embracing a flight to better-located, better-leased properties, Nadji said. He noted that Class A offices are performing well across the country, including in urban markets, even as older and “tired” buildings struggle the most. Nadji also said shopping centers are “back,” in his view, in part because the sector has not been oversupplied for years. The industry has not meaningfully built new shopping centers in more than a decade, and obsolete properties have either been repurposed or demolished, helping to balance supply and demand. That backdrop, he suggested, makes well-located retail and mixed-use centers an important category for investors evaluating current risk and reward. Rates, Trading Volume And The Next Phase Of The Cycle Nadji said many in the market had been counting on stable to falling interest rates, especially with Kevin Warsh, President Donald Trump’s choice to succeed Jerome Powell, taking over as Federal Reserve chair. Instead, the 10-year Treasury yield near 4.70% has forced investors and lenders to adjust to a higher-for-longer cost of capital. Even so, Nadji said trading and financing volumes have been increasing from quarter to quarter despite higher rates, which he attributed to three years of price corrections and deals delayed between 2023 and 2025. With property values down roughly 20% in that period and many loans coming due, “those properties have to trade,” he said, because they cannot be easily refinanced at today’s valuations and interest costs. Nadji told Bloomberg Radio that this is part of the recurring nature of real estate cycles, arguing that “demand always comes back in a different form” and that investors who understand where capital and tenants are heading will be best positioned in the current phase.