Commercial Real Estate Solid Says Marcus & Millichap CEO

Office properties are the only major property type that has yet to surpass pre-recession price levels. That means prices can still go up and commercial real estate investors have room to profit, said Hessam Nadji, CEO of Marcus & Millichap (MMI) - Get Report . 'In a low yield environment commercial real estate shines as an alternative,' said Nadji. 'Looking ahead, the usual threats of overleveraging and overbuilding are not on the scene.' Marcus & Millichap, down 6.5 percent year-to-date, is the largest real estate brokerage firm in the U.S., specializing in commercial real estate investment sales, financing, research and advisory services. Office properties have had a 'late-to-the party recovery', according to Nadji, because companies had so much excess space leased as they emerged from the recession that job growth did not immediately translate into demand for additional space. That has changed in his view and a continued escalation of demand has translated to healthy rent growth. This slow ramp-up curtailed the flow of capital into office assets during the early part of the expansion cycle, causing the sector to lag other property types such as apartments. The professional and business services sector, which predominantly occupies office space, is forecast to add more than 600,000 jobs this year, according to Nadji.