Fitch Lowers Outlooks for Hotel, Multifamily and Industrial Through 2023
Fitch Ratings lowered its U.S. CMBS 2022 hotel, multifamily and industrial sector outlooks to neutral from improving following a broad, mid-year reassessment of all sectors. Downward revisions of hotel, industrial and multifamily outlooks reflect deterioration in Fitch’s macroeconomic outlook and mounting headwinds anticipated through 2023.
Although risk and uncertainty have risen, overall asset performance for U.S. CMBS is expected to be neutral as property cash flows continue their recovery from pandemic lows. The rating agency lowered its U.S. GDP growth forecasts to 2.9% in June from March’s forecast of 3.5% “with expectations for a series of interest rate hikes to counter higher inflation, which is expected to average 7.8% in 2022, up from 2021’s average of 6.9%.”
Outlooks for office and retail remain unchanged at neutral. Fitch said these sectors continue to face ongoing secular challenges, with a bifurcation of asset performance trends among underlying subsectors and by property quality.
- ◦Financing
- ◦Economy
