Company: MMI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001578732-25-000040
Chunk: 145

Company: Marcus & Millichap, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 145
---
 or negative impact on our business. Economic indicators and projections related to job growth, unemployment, interest rates, retail spending and consumer confidence trends can have a positive or negative impact on our business. Overall market conditions, including global trade, interest rate changes, inflation, job creation, and global events can affect investor sentiment and, ultimately, the demand for our services from investors in real estate.

The reset of U.S. trade policy in April raised uncertainty in the financial markets. Expectations of an inflation surge, higher interest rates and a weakening economic outlook led to increased investor caution, causing activity to briefly falter. Nonetheless, key economic indicators through the second quarter continued to demonstrate generally positive momentum, with about 191,000 new jobs added in the quarter, increasing the first half of 2025 total to 597,000 new jobs. The unemployment rate remained stable, ending the second quarter at 4.1% although the labor force participation rate has receded modestly and the number of new job openings has retreated. In the June reading, retail sales showed some recovery from the softening trend of the prior two months. Other signs of economic slowing included slackening home sales, lowered consumer confidence and a modest uptick in inflation.

Although the economy remains generally sound, the lack of clarity from the U.S. presidential administration regarding tariffs and trade policy has made it increasingly difficult to predict the economic outlook. Recession risk remains 

31

modestly elevated, and inflation risk continues to be a top concern. The Federal Reserve has remained cautious in its outlook, with most predictions of a potential reduction of the overnight rate occurring in September 2025 at the earliest. The U.S. presidential administration has announced a variety of trade deals, most notably with the U.K., Japan and the European Union. However, on July 31, 2025, the administration announced sweeping tariffs effective on August 7, 2025 on most countries that had not reached a trade deal. If additional trade deals are entered into, with tariffs being lowered and stabilized, the economic outlook could strengthen.

Within the broader economic context, commercial real estate fundamentals remain sturdy, with most property types delivering positive space absorption. Apartment demand remained robust through the first half of 2025, exceeding elevated construction completions and supporting modest but positive rent gains. Retail space demand was marginally negative through the first half of 2025, but the resulting uptick in vacancy has been minimal. Industrial space demand has remained nominally positive, and office space demand has continued to gain momentum