At the 2025 CREW Annual Convention in Austin, Hessam Nadji, President & CEO of Marcus & Millichap, delivered a compelling session on the macroeconomy, capital markets, and the evolving commercial real estate (CRE) landscape. Moderated by Colette English Dixon, the discussion offered timely insights for investors, lenders, developers, and operators navigating today’s market.
As part of our commitment to staying ahead of industry trends, LCS attends conferences like CREW to hear directly from market leaders and bring those insights back to our clients and community. We believe that informed decisions start with informed perspectives—and we’re here to help you apply them.
Key Takeaways
Tariffs & Inflation: The Hidden Risk
The U.S. tariff rate has surged to an effective 18%—a level not seen since the Depression era. While global trade continues, this shift is expected to drive structural inflation.
Companies are absorbing costs now, but consumers will likely bear the burden soon, impacting affordability across multifamily, retail, and construction sectors.
Interest Rates: A New Normal
Rates are expected to stabilize around 4–4.5%, creating a more disciplined investment environment and reshaping underwriting assumptions.
CRE Sector Performance
- Retail is rebounding due to lifestyle shifts and increased weekday traffic.
- Office is recovering, especially in suburban Class A spaces, with return-to-office rates nearing 80%.
- Multifamily remains strong due to affordability gaps and declining construction starts.
- Industrial is cooling after years of rapid growth.
Investment Strategy
With asset prices adjusting and cap rates stabilizing, now is a compelling time to buy or sell. Long-term investors are capitalizing on assets priced 30–40% below replacement cost.
AI in CRE: Promise & Pitfalls
AI is transforming underwriting and analytics—but accuracy remains a concern. The real opportunity lies in using AI to free up time for client engagement and strategic advising, not replacing human judgment.
Demographics & Wealth Transfer
The U.S. enjoys a unique demographic advantage: 11,000 people turn 65 daily, while 12,000 turn 21. This dual surge fuels both capital movement and workforce growth. An estimated $80 trillion in wealth will be transferred over the next 30 years, presenting a major opportunity for CRE investment.
Operational Efficiency
Nadji emphasized the importance of looking inward—evaluating team roles, job satisfaction, and operational workflows to drive efficiency and resilience during downturns.
What This Means for You
As an LCS client or prospect, these insights underscore the importance of:
- Acting decisively in a shifting market
- Reassessing your portfolio strategy
- Leveraging technology and data to stay competitive
- Preparing for demographic and capital shifts
How LCS Can Help
LCS is a nationwide Environmental, Construction, and Appraisal Due Diligence firm with 27 years of experience. We help clients navigate market cycles with:
- Environmental Site Assessments and Phase I/II Reports
- Construction Risk Management and Cost Reviews
- Appraisal Reviews and Valuation Support
Whether you’re evaluating a new investment, managing construction risk, or validating asset value, LCS delivers the clarity and confidence you need.
Ready to Talk?
Visit www.lenderconsulting.com to explore how LCS can support your goals—or https://www.lenderconsulting.com/contact-us/ with our team today.
Citation Note
This summary is based on insights presented during the General Session and Lunch:
Global Economic Outlook at the 2025 CREW Annual Convention. The session featured Hessam Nadji, President & CEO of Marcus & Millichap, a nationally recognized thought leader in commercial real estate. Nadji shared expert perspectives on macroeconomic conditions, capital markets, investor sentiment, and sector performance, including the
impact of tariffs and global economic developments on the U.S. CRE landscape. The session was moderated by Colette English Dixon, Executive Director of the Marshall Bennett Institute of Real Estate at Roosevelt University.
For more information, visit https://www.marcusmillichap.com/ or https://crewnetwork.org/
