New York City is reopening, but Marcus & Millichap’s CEO is not predicting a return to form anytime soon.
Hessam Nadji told CNBC in an interview this week that demand was surging in suburban areas as people fled cities, a trend he predicted would continue for up to two years.
“I think the next 18 to 24 months are going to show a lot of exodus out of central business districts,” he said.
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“We’re seeing there’s a lot of office vacancy, for example, in the suburbs that have now been absorbed,” he said. “There’s a lot of demand for rental homes that we’re seeing because people are fleeing especially hot spots like New York.”
Nadji said a growing number of millennials were already looking to the suburbs before the pandemic, but the health crisis had accelerated that pattern.
“It was a trend that was starting to happen already over the last two or three years. You have to remember that 60 percent of millennials are now in their 30s,” he said.
Some of the main areas where people are migrating from include New York City, Seattle and Miami, according to CNBC.
Despite his predictions about the short-term health of cities, Nadji said he was confident that busy areas would regain their appeal.
“I just don’t think we should count out the long-term prospects of the benefits of central business districts,” he said.
[CNBC] — Sylvia Varnham O’Regan