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Commercial real estate broker Marcus & Millichap’s revenue and profit grew in the third quarter as larger property deals picked up. This matters to people who own the stock and to anyone watching the commercial property market.
Marcus & Millichap reported Friday that third-quarter revenue rose 7.5% to $208.4 million, as stronger sales of larger commercial properties helped the brokerage increase profit despite pressure from interest rates and property valuations.
Net income reached $1.0 million, or 3 cents per diluted share, compared with $0.2 million, or 1 cent per share, a year earlier, according to the company’s November 6 results announcement.
Larger transactions lead the growth
Brokerage commissions increased 7.4% to $174.1 million. The company attributed the gain primarily to a 12.6% increase in brokerage sales volume, partly offset by a lower average commission rate.
Revenue from its middle-market and larger-transaction business rose 18.1% to $62.0 million, while private-client brokerage revenue increased 3.6% to $106.0 million. Financing fees grew 2.6% to $27.0 million.
Chief Executive Hessam Nadji said private-client activity grew more slowly as the gap between buyers’ offers and sellers’ asking prices widened following an increase in Treasury yields during the quarter. Larger transactions contributed more strongly to revenue growth, he said.
Maturing loans put pressure on owners to sell
For commercial-property owners and buyers, the report points to a market where financing deadlines are becoming an important reason to transact. Nadji said more assets need to change hands as loans mature and owners run out of time to complete previously postponed sales going into 2027.
He expects price adjustments and lenders’ ability to dispose of underperforming assets to support increased sales activity. The company also expects interest-rate volatility to temper the near-term outlook.
Quarterly operating expenses rose to $209.3 million from $196.3 million, with higher commissions paid to the firm’s sales and financing professionals accounting for much of the increase. Adjusted EBITDA, a non-GAAP earnings measure, rose to $8.2 million from $6.9 million.
For the first nine months of 2026, revenue increased 14% to $582.8 million. Net income was $1.8 million, compared with a $15.2 million loss a year earlier.
JBizNews Desk | Calabasas, California
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