Uncertain signals coming from the Fed about the direction of interest rates has been damaging to the momentum of commercial real estate trading, said Macus & Millichap CEO Hessam Nadji during an appearance on Yahoo! Finance.

Private individual investors, high net worth investors and small partnerships, which make up the vast majority of CRE ownership, are very sensitive to interest rate trends. If the marketplace expects interest rates to come down, sellers tend to wait for more favorable values. If rates are going to go up, it’s the reverse, said Nadji.

“It is extremely important that the Fed be clear in its messaging,” he said. “Looking ahead, the market is beginning to come to terms with the fact that we're not going back anywhere near the lows of the previous cycle. The inflation pressure is waning, but it's not going to go away, so the Fed is going to be limited in just how aggressive they can be in lowering rates.”