Marcus & Millichap (NYSE:MMI) reported an 18% year-over-year increase in first-quarter 2026 revenue, as management said improving commercial real estate transaction activity, a recovery in its private client business and growth in financing helped the company start the year with stronger momentum.
President and Chief Executive Officer Hessam Nadji said the company’s results reflected “improving market conditions” and the effect of more than two years of client outreach, valuation updates and seller consultations that are now converting into transactions. Total revenue rose to $171.5 million from $145 million in the prior-year quarter, which Chief Financial Officer Steve DeGennaro described as the company’s strongest first-quarter revenue growth in four years.
Adjusted EBITDA improved to nearly $3 million from a loss of nearly $9 million a year earlier. The company still posted a net loss of $3 million, or $0.08 per share, compared with a net loss of $4 million, or $0.11 per share, in the first quarter of 2025.
Brokerage Activity Improves Across Several Property Types
Real estate brokerage commissions totaled $138 million in the quarter, up 12% year over year and representing 81% of total revenue. Marcus & Millichap completed 1,348 brokerage transactions with total volume of $7.9 billion, increases of 15% and 19%, respectively, compared with the prior-year quarter. The average transaction size rose 3% to $5.9 million.
Nadji said improvement was broad-based, with seven of the 11 property types the company services generating brokerage revenue growth. He said office transactions posted the largest gains in several years, supported by “significant price resets” and improving demand for space tied to return-to-office mandates. Multifamily, manufactured housing and single-tenant retail also showed strength, according to management.
The company’s core private client market accounted for $88 million, or 64% of brokerage revenue, up 13% from a year earlier. DeGennaro said private client transaction count increased 19% and dollar volume rose 22%, reflecting “more realistic price expectations by sellers.”
Nadji said the private client recovery is being helped by a narrowing bid-ask spread, with more sellers accepting current interest rates as “the new normal.” He added that small and midcap multifamily and single-tenant properties, which had been heavily affected by higher rates and lender constraints, are beginning to see more transactions after a prolonged correction since 2023.
Revenue from larger transactions above $20 million rose 25% to $25 million, accounting for 18% of brokerage revenue. DeGennaro said middle market transaction revenue declined 6% to $20 million.
Financing Revenue Jumps as Lending Conditions Improve
Marcus & Millichap’s financing business generated $27 million in revenue, up 48% from $18 million in the prior-year quarter. Financing volume rose 60% to $3.1 billion across 398 transactions, while the transaction count increased 18%. The average financing transaction size grew 36% to $7.8 million.
Nadji attributed the growth to recruiting and acquisition efforts that brought experienced originators and finance boutique firms into the platform. He said the company continues to focus on adding origination teams in key regions while also benefiting from veteran originators already with the firm.
Acquisition financing accounted for 61% of originations, up from 50% a year earlier. Nadji said the shift is consistent with a rising transaction market, where more activity is tied to acquisitions rather than refinancings and recapitalizations. He also said lenders are becoming more competitive, including through higher loan-to-value ratios, though underwriting and sponsor qualifications remain tight.
The company used 188 unique lenders during the quarter. In response to a question from Citizens Bank analyst Mitch Germain, Nadji said that number had been “measurably less” in 2023 and 2024, particularly after regional banks pulled back. He said banks and credit unions began returning more actively to the lending network in recent quarters.
Other Revenue Nearly Doubles
Other revenue, including leasing, consulting, advisory and ancillary fees, increased 98% to $6.5 million from $3.3 million a year earlier. DeGennaro said the increase primarily reflected growth in loan sales and advisory services, consistent with rising distressed and transitional loan sales.
Nadji said auction revenue nearly doubled year over year, while revenue from loan sales and IPA Capital Markets increased 39%. He described those businesses as alternative marketing and sales channels for investors and lenders, with additional growth opportunity.
Expenses Show Operating Leverage
Total operating expenses rose 9% to approximately $177 million, compared with the company’s 18% revenue growth. Cost of services was $104 million, or 60.4% of revenue, improving by 50 basis points year over year. Selling, general and administrative expense was $71 million, essentially flat with the prior-year period.
DeGennaro said SG&A benefited from cost containment and somewhat lower typical first-quarter expenses due to the last-minute cancellation of the company’s annual sales award trip because of security concerns. SG&A as a percentage of revenue improved to 42% from 49% a year earlier.
Marcus & Millichap ended the quarter with $335 million in cash, cash equivalents and marketable securities and no debt. The company repurchased approximately $23 million of common stock during the quarter at a weighted average price of $26.22 per share. Its board also approved an additional $70 million share repurchase authorization, bringing total available authorization to $90 million. The company declared a semiannual dividend of $0.25 per share, or about $10 million, paid in early April.
Management Points to Recovery, but Notes Macro Risks
Nadji said commercial real estate fundamentals remain healthy and that more catalysts are emerging to support transaction growth. He said pricing has generally adjusted and continues to recalibrate by asset quality, while new construction is slowing sharply, particularly in industrial and multifamily.
On headcount, Marcus & Millichap ended the quarter with 1,621 investment brokers, up 87 from the first quarter of 2025. Nadji said the company had a larger-than-usual seasonal reduction in the sales force due to proactive terminations of agents in development who were not meeting key metrics. He said the company is becoming more selective in recruiting and is placing greater emphasis on internships and fellowship programs that are producing higher-performing agents.
In the question-and-answer session, Germain asked whether customers had become more immune to rate movements. Nadji said they were not immune and remain sensitive to rates, but he said pent-up demand from delayed transactions is currently outweighing rate volatility for many clients. He said some sellers no longer expect a large decline in rates to restore peak valuations, while maturing loans and refinancing challenges are also contributing to transaction demand.
Looking ahead, DeGennaro said second-quarter revenue is expected to show continued year-over-year improvement, with normal seasonality supporting a sequential increase from the first quarter. He said April results were encouraging, but management remains mindful of geopolitical and macroeconomic variables that could moderate activity.
About Marcus & Millichap (NYSE:MMI)
Marcus & Millichap (NYSE: MMI) is a leading commercial real estate brokerage firm focused on investment sales, financing, research and advisory services. Founded in 1971 by George M. Marcus and William A. Millichap, the company has grown to specialize in the marketing of multifamily, retail, office, industrial, hospitality and other commercial property types. Through an extensive network of investment specialists, Marcus & Millichap connects property owners and investors with tailored transactions across a range of asset classes.
The firm offers comprehensive capital markets solutions, including debt and equity placement, structured finance, and customized financing programs.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
The article "Marcus & Millichap Q1 Earnings Call Highlights" first appeared on MarketBeat.
