Investment sales brokerage Marcus & Millichap recorded a loss of about $10M in the first three months of 2024, the firm's fourth consecutive quarter in the red.

The Southern California-based firm's loss was up 72.4% from the $5.8M deficit it reported in Q1 2023, according to its first-quarter earnings report. The poor quarter is due to a combination of declining sales in a high-interest-rate climate and the company's long-term spending, CoStar reports.

The expenditures are aimed at bringing in and retaining top brokers, acquiring boutique firms and investing in the business, CEO Hessam Nadji told investors on an earnings call.

"The shift toward higher-for-longer has prolonged interest rate volatility, which remains disruptive to real estate valuations, marketing of listings and transaction closings," Nadji said.

U.S. commercial real estate sales were at their lowest levels in 2023 for any full year since 2012, according to CBRE. The first three months of 2024 were even slower, with individual asset sales down 19% year-over-year, according to MSCI Real Assets.

Marcus & Millichap's total revenue was $129.1M for the quarter, a 16.6% decrease year-over-year. The company's real estate brokerage commissions came in at $109.5M, dropping 18.9% from the same period in 2023.

Nadji and other brokerage executives expect deal volume to increase in the second half of 2024 as buyers and sellers get indicators that inflation and high borrowing rates are properly managed. But Marcus & Millichap's focus on investment sales makes its bottom line more sensitive to lower activity. CBRE, JLL and Colliers each reported net incomes of at least $43M in the first quarter.