from Bloomberg found that 65% respondents say the U.S. office market won't recover without a severe crash. Marcus & Millichap CEO Hessam Nadji tells Yahoo Finance Live that he is seeing"older, obsolete buildings suffer the most from the lack of demand," but"newer, higher-quality buildings are performing much better." Nadji says there are already some distressed sales in the sector. However, outside of office, it's a different story.
The interest rate shock that the fed has delivered to all of commercial real estate and banks pulling back from lending because of these sort of cautionary notes and concerns about commercial real estate is affecting the whole industry. And we're going through a pricing adjustment right now. But it's really concentrated in older office buildings.So even if we're just talking about a percentage of a percentage, right-- and it's not huge.
In general, there is a tendency to cooperate and avoid write-downs and avoid the significant sort of, if you will, domino effect that could happen from too many distressed properties being sold at the same time. Again, I want to emphasize, we're not seeing the level of distress at all in multifamily and even shopping centers, hospitality. All of those sectors have recovered very well since the pandemic. So this is, again, concentrated predominantly in the office sector.