Company: MMI
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001578732-25-000015
Chunk: 80

Company: Marcus & Millichap, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 80
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Factors Affecting Our Business 

Our business and our operating results, financial condition and liquidity are significantly affected by the number and size of commercial real estate investment sales and financing transactions that we close in any period. The number and size of these transactions are affected by our ability to recruit and retain investment sales and financing professionals, identify and contract properties for sale, and identify those that need financing and refinancing. We principally monitor the commercial real estate market through four factors, which generally drive our business. The factors are the economy, commercial real estate supply and demand, capital markets, and investor sentiment and investment activity.

The Economy 

Our business is dependent on economic conditions within the markets in which we operate. Changes in the economy on a global, national, regional, or local basis can have a positive 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 economic landscape entering 2025 may change significantly due to the U.S. presidential and congressional elections in 2024 resulting in Republican control of both houses of Congress and the executive branch of government. Dramatic policy changes have the potential to reshape both growth and inflation outlooks, in turn spurring increased uncertainty. Following the two 25 basis point rate reductions by the Federal Reserve in November and December 2024, it 

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appears further rate cuts will be placed on hold pending additional clarity on federal tax, budget, immigration, trade, deregulation and domestic policies.

Positive readings of key fourth quarter metrics including the addition of more than 500,000 jobs, low unemployment, positive retail sales, rising small business optimism, increasing consumer sentiment and a variety of other metrics suggest economic durability, but the federal policy decisions could alter the trajectory of the economy. Policies such as the introduction of broad-based trade tariffs, tighter immigration control and reduced taxes could put upward pressure on inflation, keeping interest rates elevated. Nonetheless, positive fourth quarter economic momentum supported increased household formation, in turn supporting strong demand for rental housing. Likewise, sturdy consumption bolstered demand for both retail and industrial space. Office space demand also gained ground as more employees worked from the office more frequently, whether by choice or by corporate mandate. The strengthened housing and commercial real estate space