Repricing is happening across every property sector, and no asset class appears immune. But the non-core lodging sector faces perhaps the highest potential risk, as the asset class is closely tied to the overall economy, according to Green Street. 

The firm lowered its overall estimates for near-term rents, occupancy and NOI growth for core property sectors as of the middle of this year, and its Commercial Property Price Index for the month of June shows that property values have dropped by nearly 5%. But in spite of rising inflation, Green Street predicts just a “mild recession” that will be reflected in moderating employment growth in the fourth quarter.

 

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