Marcus & Millichap (MMI) Q3 2026 Earnings Call: Revenue Rises 7.5% as Rate Volatility Persists

Key Takeaways

• Marcus & Millichap (NYSE: MMI) reported Q3 2026 revenue of $208 million, up 7.5% year over year. Nine-month revenue increased 14% to $583 million.
• Brokerage revenue rose 7% to $174 million. Transaction volume increased 13% to $9.4 billion, although completed transactions were essentially flat at 1,584.
• Middle-market revenue grew 17% to $31 million, while revenue from transactions above $20 million increased 20% to $31 million. Private-client revenue rose 4% to $106 million.
• Adjusted EBITDA reached $8.2 million, compared with $6.9 million a year earlier. Nine-month adjusted EBITDA improved to $23.3 million from a $400,000 loss.
• Management identified interest-rate volatility as the main constraint on transaction execution. The 10-year Treasury yield moved roughly 80 basis points between late June and late September, widening bid-ask spreads and forcing asset repricing.
• MMI ended the quarter with $373 million in cash, cash equivalents and marketable securities, with no debt. The company is preserving additional capital for potential acquisitions and internal investment.

Core Financial Results

Business and Operating Performance

Private-client brokerage remained MMI’s largest business, generating $106 million of revenue. Its 4% growth was slower than other brokerage categories because lower-priced transactions were more sensitive to financing costs and faced a difficult comparison with Q3 2025’s 17% increase.

Middle-market revenue rose 17% to $31 million. Revenue from transactions above $20 million increased 20% to $31 million. The shift toward larger transactions lifted total volume but reduced the average commission rate by 9 basis points and increased the mix of revenue generated by senior producers with higher commission splits.

Cost of services reached $133 million, or 64% of revenue, up 160 basis points year over year. Management attributed the increase mainly to revenue growth and the greater contribution from large brokerage and financing transactions.

MMI is pursuing six growth priorities: expanding its private-client platform, building its Institutional Property Advisors business, growing MMCC and capital markets capabilities, scaling auctions, developing leasing operations and upgrading enterprise systems with AI-enabled tools.

The company expects strategic initiatives to add costs equal to approximately 1% to 2% of revenue over the next 18 to 24 months. Management does not expect leasing to make a meaningful revenue contribution in 2027 because of the required planning and ramp-up period.

Management Guidance

Management expects Q4 revenue to increase sequentially because of normal year-end seasonality. However, it remains measured about the near-term outlook due to interest-rate volatility and uncertainty. The company also does not expect the benefit from permanent bonus depreciation to be as significant as it was in Q4 2025.

Cost of services as a percentage of revenue is expected to rise sequentially from Q3, following the usual quarterly pattern. SG&A expense in dollar terms should be comparable with Q3, reflecting continued technology investment and strategic hiring.

The Q4 effective tax rate is expected to range from 45% to 50%.

Risks and Areas to Watch

Interest-rate volatility remains the central operating risk. Management said the 10-year Treasury yield has moved at least 50 basis points in either direction 16 times over the past four years. These movements affect valuations, bid-ask spreads, lender underwriting, transaction timelines and producer capacity.

Higher rates have particularly affected private-client transactions. Even properties listed at more realistic prices can require repricing when financing costs change rapidly. Management said the primary constraint is the sellability of current inventory rather than a lack of new listings.

MMI also continues to experience elevated turnover among newer agents because prolonged market volatility makes it harder for them to reach acceptable production levels. Investments in technology, talent, leasing and potential acquisitions will also moderately increase costs over the next 18 to 24 months.

Analyst Q&A Highlights

Management said lenders are becoming more willing to take decisive action on underperforming properties and maturing loans rather than relying on extensions or modifications. It believes this change, combined with $1.2 trillion of expected commercial real estate loan maturities in 2027 and 2028, could support higher transaction activity. Multifamily and retail are expected to represent nearly half of those maturities.

MMI entered the period approaching 2027 with near-record inventory. Management said very few transactions had been abandoned entirely; most were being delayed or repriced as buyers, sellers and lenders sought renewed alignment. It believes much of the inventory could transact within a 10% to 15% price range, subject to interest-rate conditions.

On capital allocation, management said share repurchases slowed as MMI evaluated greater internal technology investment and potential acquisitions, particularly in brokerage, financing and leasing. The company is retaining more liquidity for these opportunities while continuing its dividend program.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Greetings and welcome to Marcus & Millichap's Third Quarter 2026 Earnings Call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Jacques Cornet. Thank you. You may begin.

Jacques Cornet

Thank you, Operator, and good morning, and welcome to Marcus & Millichap's Third Quarter 2026 Earnings Conference Call. With us today are President and Chief Executive Officer, Hessam Nadji, and Chief Financial Officer, Steve DeGennaro.

Before I turn the call over to management, please remember that our prepared remarks and the responses to questions may contain forward-looking statements. Words such as may, will, expect, believe, estimate, anticipate, goal, and variations of these words and similar expressions are intended to identify forward-looking statements. Actual results can differ materially from those implied by such forward-looking statements due to a variety of factors, including but not limited to general economic conditions and commercial real estate market conditions, the company's ability to retain and attract transactional professionals, the company's ability to retain its business philosophy and partnership culture amid competitive pressures, the company's ability to integrate new agents and sustain its growth, and other factors discussed in the company's public filings, including its annual report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2026.

Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can make no assurance that its expectations will be attained. Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

In addition, certain financial information presented on this call represents non-GAAP financial measures. The company's earnings release, which was issued this morning and is available on the company's website, represents a reconciliation to the appropriate GAAP measures and explains why the company believes such non-GAAP measures are useful to investors. This conference call is being webcast. The webcast link is available on the Investor Relations section of the company's website at www.marcusmillichap.com, along with the slide presentation you may reference during the prepared remarks.

With that, it is my pleasure to turn the call over to CEO, Hessam Nadji.

Hessam Nadji

Thank you, Jacques. On behalf of the entire Marcus & Millichap team, good morning, everyone, and welcome to our third quarter 2026 earnings call.

I'm pleased to report that MMI delivered a solid quarter despite a sharp increase in interest rates, which once again widened bid-ask spreads and pressured valuations of our inventory and transaction pipeline. Total revenue increased 7.5% to $208 million in the third quarter, bringing revenue year-to-date to $583 million, up 14% from a year ago. Brokerage revenue grew 7%, led by our middle market and larger transaction segments, which grew 17% and 20% respectively.

Private client revenue rose 4%, reflecting the more pronounced impact of higher interest rates at lower price points. It should be noted that the 10-year Treasury yield moved by 80 basis points between late June and late September, which caused a fair degree of repricing. The year-over-year comparison for our private client segment was also particularly challenging, given the 17% gain we registered in the third quarter of 2025. Despite the recent round of interest rate volatility, financing availability and lenders' appetite to compete and put capital to work remain favorable, albeit with elevated caution on underwriting and borrower qualification.

I'm also pleased to highlight the company's improved profitability. Adjusted EBITDA increased 20% in the third quarter and reached $23 million year-to-date, compared to a $400,000 loss during the first 9 months of 2025. Our team remains laser-focused on improving profitability while continuing to invest in critical infrastructure, tools, and talent. This includes ongoing technology investments, some upfront costs associated with opportunistic talent acquisition, and outside resources engaged during the quarter to help us evaluate potential strategic acquisitions.

As I've mentioned on prior calls, MMI's near-term profitability continues to reflect the expensing of investments in top talent retention and acquisition over the past 5 years. Market conditions have hampered revenue production for many of the leading sales and financing professionals we have invested in. Therefore, our strategy to achieve operating leverage is to control costs while maintaining essential investments, maximizing revenue growth per producer, and advancing key strategic initiatives.

The biggest challenge in delivering more robust and consistent revenue growth is interest rate volatility, a major headwind to our sales force's productivity. Over the past 4 years, the 10-year Treasury yield has moved by at least 50 basis points in either direction 16 times. Each significant rate movement affects valuation, bid-ask spreads, marketing timelines, lender underwriting, and whether deals can even pencil out. Keeping transactions on track requires more time, leaving even the most experienced producers with less capacity to develop new business. This has been very frustrating for our entire team.

This prolonged market volatility also makes it harder for new producers to reach acceptable production levels. As I've shared on previous calls, this is the underlying driver of our elevated new agent turnover, making quarterly tracking of net hires more volatile. We're also shifting new talent recruiting to rely more heavily on alternative channels, including our very successful internship and fellowship programs. These initiatives have developed higher quality new producers who are gaining momentum, but will take time to translate into more measurable net additions to our sales force.

Despite these near-term challenges, I want to point out several trends that remain very encouraging. Significant repricing of real estate has already occurred, with further adjustments underway as the market adjusts to interest rates remaining elevated longer, and much more so than previously expected. Sellers' motivation to transact is increasing as the likelihood of interest rates returning to prior levels becomes a distant hope. More sellers are listing properties at realistic prices and showing greater willingness to transact as buyers seek more of a return premium. However, price adjustments vary widely by property type, market, and asset quality, which is where Marcus & Millichap's sales and financing specialists truly stand out through local expertise, deep relationships, and real-time market intelligence.

Situational distress from weak operations, lower than expected rent growth over the past several years, and the $1.2 trillion of loan maturities expected in 2027 and 2028 should result in higher transaction activity. Lenders are better positioned to address underperforming assets and maturing debt that cannot be refinanced at current interest rate levels without the injection of significant fresh equity. Over the next 2 years, multifamily and retail loan maturities will account for nearly 50% of the total volume, positioning MMI ideally to provide solutions for affected owners and lenders in our leading business segments.

Looking ahead, our long-term strategy for scaling the business, maximizing revenue growth, and achieving operating leverage centers on 6 key initiatives that are timely for me to refresh, given our current business planning process underway for 2027.

Our first priority is to further expand our market-leading private client platform across geographies and property types. Despite our market dominance in this segment, as I've shared with you before, the vast and fragmented nature of the micro-cap and middle-market commercial real estate market offers substantial room for growth. More effective hiring, training, deployment, and producer development will play a pivotal role in capturing this opportunity under the guidance of our local market leaders and divisional chief revenue officers. We are very well positioned to leverage this talent for further growth.

The second expansion strategy is to further build out our IPA platform, which is designed to bring advisory and brokerage capabilities to major accounts and institutional investors. Adding IPA teams in multifamily, retail, office, and industrial complements our private client business and has proven to be a scalable growth opportunity.

Third, we're building on the progress we've made in expanding our finance division, MMCC. This includes developing and recruiting leading loan originators and growing our IPA capital markets platform. Collaboration between our financing specialists and sales teams has proven to be highly effective and, again, points to the opportunity for scaling. We're actively expanding our financing division through experienced hires and targeting boutique mortgage banking firms for acquisition. We're also exploring complementary ways to broaden our financing capabilities.

Fourth, we're expanding our auction division, which we launched organically 3 years ago. Since then, our auction specialists have successfully integrated this service into our core brokerage offering. Collaboration across our auction, investment sales, and finance teams has proven effective and, again, scalable. In recent months, we added auction specialists in strategic regions to enable more internal collaboration with our sales force and generate incremental new business.

For our fifth strategy, we're scaling our leasing capabilities in key markets. The integration of leasing and investment sales offers a strong advantage in our private client and middle market segments, where MMI can bring significant platform-level advantages to owners and investors we have relationships with. Retail leasing is our priority given our existing footprint and the opportunities for collaboration between leasing specialists and our retail investment sales force. We expect to grow leasing through a buy-and-build approach, enabling us to acquire boutique firms and groups, as well as recruiting experienced teams in select markets. During the third quarter, 2 seasoned leasing executives joined senior management to help develop the strategy, systems, and support infrastructure for this initiative. Given the required planning and ramp-up time necessary to offer best-in-class support, we do not expect a meaningful revenue contribution from this initiative in 2027. However, we believe the long-term strategy will be extremely accretive to MMI's growth plan.

Last but certainly not least, over the next 12 to 18 months, we plan to upgrade a number of enterprise systems and implement a series of AI-enabled tools. Our strategy blends a series of proprietary tools, enhancements to legacy proprietary technology, as well as the leveraging of commercial systems, all integrated into the MMI ecosystem. MMI is well-positioned to leverage its market-leading brand and footprint to enter new revenue channels and offer more services to our core clients.

We've worked hard to maintain a strong balance sheet and a balanced capital allocation strategy. Since launching the plan in 2022, we have returned $132 million to shareholders through dividends and $120 million through share repurchases. The company's growth initiatives will take time to produce meaningful, sustainable, incremental revenue growth and will moderately increase costs over the next 18 to 24 months. However, we are confident that each initiative's close alignment with our core business will drive efficiencies, cross-selling opportunities, repeat business, and greater operating leverage over the next several years.

With that, I will turn the call over to Steve for more details on our financial results. Steve?

Steve Degennaro

Thank you, Hessam. Total revenue for the third quarter was $208 million, an increase of 7.5% compared to $194 million in the third quarter of last year. Year-to-date, total revenue was $583 million, up 14% compared to $511 million a year ago.

Looking at revenue by segment, real estate brokerage commissions were $174 million for the quarter, an increase of 7% year-over-year, and accounted for 84% of total revenue. We completed 1,584 brokerage transactions, essentially flat with last year, for total volume of $9.4 billion, an increase of 13%. The volume increase, along with a 9 basis point decline in the average commission rate, is reflective of a shift in mix towards larger transactions. For the 9-month period, brokerage commissions were $479 million, an increase of 12% compared to the prior year.

Within brokerage, for the quarter, our private client business grew 4% year-over-year to $106 million against a very strong third quarter last year. Our middle market business grew 17% to $31 million, and our larger transaction segment, covering deals above $20 million, grew 20% to $31 million.

Revenue from our financing business was $27 million in the third quarter, an increase of 3% compared to $26 million in the prior year quarter, which itself was a 28% year-over-year increase. For the 9-month period, financing revenue was $84 million, an increase of 19% compared to the prior year. Other revenue was $7 million in the quarter compared to $5 million in the third quarter of last year. For the 9-month period, other revenue totaled $19 million compared to $13 million a year ago.

Turning to expenses, total operating expense for the quarter was $209 million compared to $196 million a year ago. Cost of services was $133 million, or 64% of revenue, an increase of 160 basis points compared to the same period last year, primarily due to the increase in year-to-date revenue over the prior year and a greater mix of revenue from large transactions in both brokerage and financing that are typically generated by more senior producers on higher commission splits.

Selling, general, and administrative expense for the quarter was $73.5 million, or 35.3% of revenue, compared to $72.5 million, or 37.4% of revenue, in the same period last year. For the 9-month period, SG&A totaled $216 million, slightly above the prior year. The increase in SG&A reflects our investment in enterprise technology development as well as strategic headcount additions related to new business initiatives, partially offset by reductions elsewhere.

Let me expand on each of these major initiatives. Enterprise technology development includes standing up a new HRIS system while also implementing a new ERP system, as well as various upgrades to our business analytics, reporting, and security applications. New business initiatives, as Hessam outlined, include senior-level opportunistic hires in leasing, retail, and auction as we look to expand these areas. We expect our investment in these strategic initiatives to represent incremental spend of approximately 1% to 2% of revenue over the next 18 to 24 months. These investments will drive long-term scalability and contribute to operating margin improvement and higher operating leverage as revenue grows.

Net income for the quarter was $1 million, or $0.03 per share, compared to $240,000, or $0.01 per share, in the prior year. Adjusted EBITDA was $8.2 million compared to $6.9 million a year ago. For the 9-month period, earnings were $0.05 per share compared to a net loss of $0.39 per share in the prior year, and adjusted EBITDA was $23.3 million year-to-date compared to a loss of $400,000 in the same period last year. Our effective tax rate for the quarter was approximately 61% compared to approximately 84% in the third quarter of last year. As a reminder, our tax rate may fluctuate from quarter to quarter.

Moving to the balance sheet, we ended the quarter with $373 million in cash, cash equivalents, and marketable securities. That's up $28 million from the end of the second quarter and down just $9 million from the end of the third quarter last year, in spite of having paid $20 million in dividends and repurchasing shares worth $42 million in the last 4 quarters. The year-over-year and sequential increases reflect continued operating cash generation. And as always, we have no debt.

In early October, we paid a semiannual dividend of $0.25 per share. We remain committed to a balanced, long-term capital allocation strategy, which includes investing in technology, recruiting and retaining best-in-class producers, and returning capital to shareholders.

Turning now to the fourth quarter, while we anticipate quarter-over-quarter sequential revenue growth due to usual year-end seasonality, interest rate volatility and uncertainty are challenges relative to prior year, and therefore we remain measured in our near-term expectations. In addition, Q4 last year benefited from a shot in the arm when bonus depreciation was first made permanent, and we don't expect the effect this year to be quite as significant.

Cost of services as a percentage of revenue in the fourth quarter is expected to follow the usual trend and be sequentially higher than Q3. On a dollar basis, SG&A is expected to be comparable to the third quarter, reflecting ongoing investment in technology enhancements and the addition of new talent added for strategic growth. The income tax rate in the quarter should be in the range of 45% to 50%.

With that, operator, we can now open the call for Q&A.

Operator

[Operator Instructions]

Our first question is from Blaine Heck with Wells Fargo. Please proceed with your question.

Question-and-Answer Session

Blaine Heck

Great, thanks. Good morning. Hessam, you pointed to debt maturities that can no longer be postponed as a potential catalyst for sales, but also a widening bid-ask spread that's keeping activity under pressure. Can you talk about what you're seeing that suggests lenders are becoming less willing to extend and whether those situations are turning into executable listings at realistic prices or just more conversations that haven't yet translated into closings?

Hessam Nadji

Good morning, Blaine. Happy to address your question. Two-fold answer.

First, the direction that we're getting from active dialogue in multiple markets directly with lenders is the basis of expecting more transactions because the tone has changed in those conversations directly with the lenders related to properties that they're going to have to take back or upcoming maturities and being proactive about discussions on what to do with them. This is very different than what we were witnessing directly from the field being sort of collectively observed than a year ago, and especially 2 years ago, where the appetite for an actual execution of a transaction or much more decisive action upon loan maturity or significantly underperforming properties hardly ever included a discussion of an immediate decision or action.

Loan modification, buying more time, expecting rates to come in, dominated the conversations in the last couple of years. That shift is the reason we believe that going into '27 and '28, there will be a lot more actual transactions that clear the market. They're going to have to be repriced in order to clear the market. And that's another area where our team is reporting a lot more realism, both by lenders of this category of potential sales and the current owners that are having some distress.

The other component of that forecast, Blaine, is tied to what happened with interest rates over the quarter in that this last round of an unexpected spike in rates really challenged the underwriting and the notion of any hope for value recovery because interest rates would go back down. It actually put a lot more properties into the red zone of not being able to really have any recapitalization or any hopes of a refinance than previously. So that was a little bit of a wake-up call for the market in a way that pushed more decisions to want to engage with us more actively on listings that we believe will come to market in the first half of 2027. And so those are the combination of factors that leads us to expect more transaction activity from that group of pipeline discussions.

The other more near-term challenge, Blaine, as a direct implication of what we've seen several times since this elongated downturn began, and that is the direct impact of higher interest rates, especially when they're unexpected, on active listings and properties that have been negotiated. They're about to go under contract or go hard with nonrefundable deposits, and all of a sudden now have an unexpected change in the underwriting because of the cost of debt or a lender wants to change the parameters of the net proceeds or the interest rate. That's always disruptive, especially in the private client market, as you know, because of the lower price points being more sensitive to the cost of debt.

And there's the kind of tug-of-war between the near-term pressure, but also seeing that the pipeline going into 2027 is likely going to have a lot more sales in it because of maturing debt and because of a different attitude by lenders and owners of underperforming properties.

Blaine Heck

Great, that's really helpful. And I guess just digging into that line of questioning deeper on transactions, the bigger constraints just fewer new listings coming to market or a lower conversion rate on deals already under contract? And then have the recent rate moves primarily pushed the closings into 2027 or caused buyers and sellers to just abandon those transactions altogether?

Hessam Nadji

Yes, our biggest challenge really is more around the sellability of the current inventory that's on the market. It's not as much of a challenge to see new inventory come to market. In '23, '24, and really much of '25, we still had a large cadre of our client base that we've been in dialogue with for multiple years about selling, they really weren't ready to pull the trigger in the hopes of something changing that would bring interest rates back down and restore values. As that hope has faded, more and more of our client base that we've been in active dialogue is now bringing inventory to market. And another positive trend is that that initial list price is more realistic.

But then when you have the kind of interest rate movement that we just had in the third quarter with a 70 to 80 basis point movement in just a few weeks, even the more realistic price gets challenged once the property is on the market. So we have near-record inventory going into 2027. We're very confident that that inventory within a 10% or 15% price range is sellable. But that's where the rub is in that the bid-ask keeps moving because of the volatility in interest rates.

So the second part of your question was around delays versus deals that have fundamentally died. We're seeing very few deals that have fundamentally died. There's a lot of motivation to sell. There's plenty of capital on the sideline to want to transact. It's a question of bid-ask, and it's a question of kind of regrouping and putting deals back under contract once we rediscover alignment between the buyer, the seller, and the lender.

The good news is that within the last few weeks, interest rates have retreated. We would hope that that is going to have a positive ripple effect going into Q1. But right now we're still kind of recovering from the ripple effect of the higher interest rates in the quarter, because there's always a several-month lag between the occurrence of interest rates going up or down and what ripples through the repricing of our inventory and the impact on our pipeline. There's always a few-month lag.

Fundamentally, the market is ready to transact, and fundamentally, there's capital that wants to come into commercial real estate, but we're seeing a lot more demand on the buy side for the risk premium that real estate has typically required above the 10-year Treasury yield. That kind of went away for a while where investors were willing not to demand that premium over the 10-year Treasury. That premium is absolutely back in the market. It's not any more than the long-term averages. It's typically 200 basis points if you look at historical data, but the market is still having to adjust to the fact that the risk premium is a requirement now in an environment where you have inflation and you have higher interest rates.

Blaine Heck

Okay, that makes a lot of sense. Last question. You didn't repurchase shares this quarter. I guess, can you talk about whether that reflects the timing and pricing of opportunities to buy stock, desire to preserve liquidity through the current environment, or greater visibility on external investments, and what would make repurchases the preferred use of capital again?

Steve Degennaro

Yes, Blaine, this is Steve. I'll take that. Our capital allocation strategy has more recently over the last several years been focused on obviously internal investments and more geared towards dividends and repurchases that did slow in the last couple of quarters as we look at other areas to deploy capital, whether that's more enhanced investment internally and in technology to allow us to scale, but also Hessam alluded to the fact that at the moment there are more opportunities out in the market for M&A on the brokerage and the financing side in particular, as well as some other areas that we're looking into. So this is a point where we're, as we always do, assess where best to deploy our capital, and at the moment we're keeping a little bit more in the quiver here for some potential opportunities.

Blaine Heck

Great. Thanks, guys.

Operator

Thanks, Blaine. Our next question is from Mitchell Germain with Citizens JMP. Please proceed with your question.

Mitch Germain

Thank you, guys. So I wanted to just dive in a little bit deeper to some of the commentary from you, Steve, in terms of strategic acquisitions. And you say the pipeline is a little bit more constructive today. I'm curious, is this kind of growing your core capabilities or, as you mentioned, leasing, is it kind of moving into new ventures? How are you approaching this process?

Steve Degennaro

Yes, great question, and you're picking up on some of the commentary that we made in our prepared remarks. Certainly on the leasing side, as Hessam mentioned, we have brought on a couple of senior-level executives to begin the buildout of that opportunity, which we're really excited about. We're tempering expectations in terms of top-line growth. It'll take a bit to build that out, but highly complementary to our investment sales business in particular. So opportunities there, but then other opportunities on the financing side in particular that still it's too early to get into any specifics, but suffice to say more opportunities presenting themselves in this environment.

Mitch Germain

The 10-year was 5.3%, it's now 4.85%. We had been given indications or been told indications from a couple of different industry people about repricing on the way up. And now we're back down, moving back down again. So, Hessam, how do your clients, how do you navigate this environment with your clients? Are you doing more outreach? Is there a way to compare it to historical trends? I'm curious in terms of how you're marketing business through this volatility.

Hessam Nadji

The volatility is the absolute opposite, toughest headwind for producer productivity. As I mentioned, the 10-year has now moved in either direction by 50 bps or more 16 times in the last 4 years. Each one of those periods requires repricing of both inventory and deals under contract. It's taken us significantly longer to market an average listing, it's taken us significantly longer to oversee the various stages of contingency removal, due diligence, and closing process, and that leaves less time for developing new business, even for our most senior producers.

So this volatility is more of a challenge for our business than just the overall higher interest rate environment, frankly, because if higher interest rates had occurred and had stabilized at one point, whatever rate the market felt was sustainable, the industry would recalibrate after some time and we would be able to kind of move on into a new cycle. The disruptive nature of this truly elongated downturn is very different than any cycle that I've been in, really, since the early '90s with the RTC, which took 4 or 5 years to process. And that was much more of a macro breakdown of commercial real estate due to massive overbuilding and overleveraging.

This isn't the same kind of drivers, but it's creating an environment where an end to a down cycle has been very difficult to reach and to define. Because last year was the effect of tariffs. This year was the effect of the Ukraine war and higher inflation, and then various reasons that the volatility has continued. Our approach, Mitch, has been to stay very close to our clients throughout this entire period of uncertainty starting in fall of 2022.

The number of times we've had to go back to the same client and revalue the real estate and do broker opinion of value 2 to 3 times a year and advise them on whether it was the right time to bring a property to market, what it would likely trade for, is at a record high, especially when those conversations have not been translating into closed transactions, unlike what we normally see. So we still believe in the client relationship. We still believe in investing in being there as many times as it takes to guide the client on what to do with an asset, both at a portfolio level and an asset level.

We're investing heavily on being in touch with our clients, both institutional, by the way, and private client. It's no different. Even a small $5 million to $10 million owner that is trying to figure out what to do with their portfolio or asset of that private client type of business needs as much guidance as a major institutional client does. And so we take it very seriously, and we've deployed all of our resources to enable our sales force to be there for them without consummation of transactions. So we believe that will come to us at some point in the future.

In fact, a lot of the inventory that's coming to market now, or I'm fairly confident will come into play in 2027, in every case will be tied back to multi-year conversations with our team on what to do with that asset, and that's what sets us apart. It's an investment in the relationship over the long term.

At the same time, we have taken several measures to just increase the touch point of our sales force with owners. It's a vast and fragmented market, as I've always said. There are literally hundreds of thousands of owners that probably don't know what to do and have been trying to navigate this last 2- to 3-year period of uncertainty that we don't have relationships with and we should be in touch with.

So while we're kind of nurturing the existing relationships and being in front of existing clients and those that we've worked with in the past, we're equally putting pressure and really pressing the gas pedal on new relationships. That's where our research comes in, the industry events come in, the branding comes in, and at a local level, marketing campaigns, outreach campaigns, contests for the salespeople, and so on.

Operator

Thank you, Mitch. We have reached the end of the question and answer session. I would like to turn the floor back over to Hessam Nadji for closing comments.

Hessam Nadji

Thank you, Operator, and thank you, everyone, for joining our call. We look forward to seeing many of you on the road and to have you back on our next quarterly call. This session is adjourned.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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