2026 Multifamily Leadership Series: Hessam Nadji, Marcus & Millichap

Connect CRE is focusing on multifamily for the fourth year of its annual Leadership Series. We invited 18 apartment heavyweights to provide their unfiltered views of the current market, its challenges and opportunities. The insights of these power players have been collected in a downloadable report, and we’re also presenting them individually, in alphabetical order. Here are insights from Hessam Nadji, President and CEO, Marcus & Millichap.

Are the markets and products you’re investing in and developing changing? 

There is a clear flight to quality where investors, particularly institutional players, are actively seeking top-tier assets. This is driven by the fact that replacement cost is well above market prices, and that buyer demand is causing cap rate compression at the top end of the market. Older and lower-quality assets are not benefiting from a deep buyer pool and continue to face further price adjustments. Maturing loans and weak operations are creating some situational distress, which in turn is generating opportunities.  

The apartments sector is working through the construction surge of the past five years, with heavy concentration in a few metros that are clearly overbuilt. The sector is improving but will perform much better in 2027 and 2028 as new supply eases.  

What does construction lending look like in the current environment? 

Construction financing generally remains available for seasoned developers, but it remains cost-prohibitive based on anticipated returns in many markets  

Is the equity environment improving for development? 

Development equity remains limited. While specific projects in certain markets can pencil and offer opportunity, the capital is very selective. Sidelined capital is working its way back into the marketplace as values adjust.

Has the debt market changed compared to a year ago, and if so, how? 

From a rate standpoint, debt capital is modestly less expensive, with the 10-year and 5-year Treasury rates in alignment with this time last year. Debt capital availability has improved as more banks have reengaged the market, and lender spreads have narrowed as risk has diminished, helping to improve capital availability.  

Have other development costs moderated? 

While the slowdown in construction activity has eased development pricing pressure to a degree, tariffs and immigration policies are continuing to put upward pressure on costs. Compared to a year ago, the cost of building materials is up 6% while construction labor costs are 4.2% higher. 

Will rising gas prices and inflation affect development? 

It won’t help. Trucking costs for materials are up by about 27% and rising oil prices are increasing the cost of plastic. If oil and gas remain elevated for an extended period, it raises the risk of inflationary pressure, a Fed response, and ultimately a broader economic slowdown.  

Lower-income households spend more of their income on paying rent. Where does a solution lie? 

As a broader trend, rents have become more affordable in many markets, with rent growth over the past three years trailing wage growth. A clear case study for improving affordability through supply is Austin, where apartment inventory has increased by 21% over the past three years and average rents have declined by approximately 16%. Class C rents are down 20% from their peak in Q2 2023. 

Give your young self some advice. 

I would tell my younger self to trust my instincts sooner, act with more confidence when the facts support the decision and rely more fully on strong partners and colleagues. At the same time, delegation does not mean stepping away from accountability. The best outcomes come from empowering capable people while staying clear about expectations, execution and results. 

Marcus & Millichap specializes in investment sales, financing and advisory services, with more than 80 offices across the United States and Canada. The firm closed 8,818 transactions worth roughly $50.9 billion in 2025, including 2,734 multifamily sales.  

Click here to read the series.