It’s safe to say that COVID appears to be in the rearview mirror as Connect Media held its flagship conference, Connect Los Angeles 2023, to an enthusiastic group of more than 500 attendees at the Hotel Indigo in downtown Los Angeles. With a star lineup of panelists and speakers, the event was topped off with George M. Marcus, Co-Founder and Chairman of Marcus & Millichap, receiving the Connect Media Lifetime Achievement Award. 

Marcus, who has been its chairman since 1971, is also chairman of Essex Property Trust (a publicly held multifamily REIT) and was one of the original founders and directors of Plaza Commerce Bank and Greater Bay Bancorp, both publicly held financial institutions. He continues to serve on the board of directors of Greater Bay Bancorp. 

Hessam Nadji, president and CEO of Marcus & Millichap, and Daniel Ceniceros, founder and CEO of Connect Media, presented the award to Marcus. Said Ceniceros, “Today we are recognizing Mr. Marcus’s influence on our industry and impact on the lives of so many people. I am pleased that this will become part of his legacy.” 

While the mood of attendees was upbeat, the realities of where the market is, particularly in office, the recent bank failures, maturing loans, and Wednesday’s rate hike announcement by the Fed, cast a pall over the event as panelist discussed what this, and other events, might mean for CRE as the interest rate hike jumped to 5.25%. 

As the event’s keynote speaker, Nadji opened the conference with a slide, “There will be more pain,” followed by some nervous laughter by the audience. Nadji went on, using a sledgehammer as an analogy in describing what the Fed had been doing. “This all could have been avoided,” he said, pointing to a lack of action by the Fed, which saw the economy in a transitional phase and would work itself out.

That was in 2021 and that was the Fed’s big mistake. “It could have been very modest gradual systematic ways of bringing the country back to normal. But by the time the Fed took out its sledgehammer and started to come down on the economy, inflation was already heading down so in some ways you could argue that the sledgehammers were overdone.” 

While Nadji’s talk was sobering, he emphasized that the fundamentals are good—except in office—and things are getting better, and he believes the worst is behind us, but he stressed, “We’re not out of the woods yet.” 

Wednesday’s move by the Fed was a topic that continued to come up on all the panels, along with the other issues that have been plaguing the CRE industry, particularly the bank failures, which some on the panels thought would have a huge impact on the business. 

The state of the office market, which by all appearances is on the bottom of the heap, was also an ongoing topic with more frustration than data dominating some of the chatter. Indeed, the pandemic, the exodus of employees from the office environment and the rise of remote work led to the decline in the office market. Whether or not a company can demand its workers to come back to the office would in fact be a viable solution, it was apparent something is needed to rejuvenate the office market. 

Additional stories on the panels will be following. 

Pictured, at top: Hessam Nadji delivers the keynote address at Connect Los Angeles. Below: Marcus & Millichap founder George Marcus, recipient of the Connect Media Lifetime Achievement Award, and Connect Media founder Daniel Ceniceros.