Marcus & Millichap



March 16, 2020


On behalf of the entire Marcus & Millichap team, we hope you, your family and loved ones are healthy and safe in light of the coronavirus outbreak. Given last week’s events and looking ahead to what we all must do to get through this episode together, I want to update you on our actions and market perspective as a company.

From the outset of the spread of the coronavirus, our priority has been the health and safety of our team, clients, partners and vendors. We have taken multiple measures to reduce risk through education, reduction of group meetings, suspension of non-essential travel and remaining connected. Marcus & Millichap’s management team throughout our 80 North American locations has been communicating and taking action on the up-to-the-minute health-related developments impacting everyone inside and outside the company.

I am grateful that so far, instances of a health scare within our organization and among our clients and colleagues has been extremely low. We hope and pray this will remain so. While we are staying laser-focused on a “Health and Safety First” mission, we recognize our responsibility to help you decipher the overwhelming volume of incoming data and navigate through heightened uncertainty.

We have long believed and perpetually invested in the power of information and technology. This foundation is enabling us to support business continuity for our investment brokers, financing professionals and research team whom we know you rely on for help with your decision making and business continuity. To amplify this commitment, two weeks ago we began to expand the technology infrastructure and connectivity that further enables our team to operate remotely and securely with real-time access to our various internal databases, data partners, vital applications and research content.

We have already produced special briefs and media commentary and will be providing a weekly update on fast moving economic and market dynamics. I have attached the link to our most recent report. Please click here to download.

The full economic impact of reduced personal consumption and commerce is unknown. This is undoubtedly daunting for all of us; however, it is critical to remember that the U.S. economy and particularly the banking system were in the best condition since WWII leading up to this unexpected shock.

The unprecedentedly strong fundamentals of the real estate industry this late in an expansion is another factor to remember at a time of uncertainty. We simply do not have broad-based overbuilding nor over-leveraging, which have been the typical cracks in the foundation in previous cycles. By contrast, the stock market appeared overextended with record prices that were not substantiated by comparable earnings in the 12-months leading to up to virus outbreak.

These factors, combined with an accommodative Federal Reserve, record low interest rates and government intervention to further boost liquidity, appear to be forming a powerful shock absorber. To this point, just yesterday, the Fed made a 100-basis point emergency rate cut, committed to Quantitative Easing and announced tight coordination with their global counterparts to shore up international liquidity. The Fed’s overnight rate is now back to 0%-0.25%, where it was during the Financial Crisis. Measures announced today include purchasing $500 billion of maturing Treasury bonds and $200 billion of agency mortgage-backed securities.

Looking ahead, it would be unwise not to expect a pull-back in space demand by varying degrees and by property type. Some, such as hotels and resorts, are already feeling the pain of the measures to limit virus contagion. However, we believe it would be equally unwise to shift to a worst-case scenario and pure fear-based execution. Depending on the length and depth of the measures needed to reduce community passing of the virus, we could see a rapid economic recovery on the other end of the current curve.

For nearly 50 years, long-term relationships and partnering with our clients through thick and thin have been our guiding principles and still drive our organization every day. We hope you view our resources and knowledge as an extension of yours and that you count on us to support you as you evaluate key strategies. We look forward to getting through this chapter together with health, safety and success.

Hessam Nadji
President and Chief Executive Officer