NEW YORK—The recovery in commercial real estate is gaining momentum with improved leasing and transaction activity, while asset valuation is reaching an inflection point, according to S&P Global Ratings. ‘
“This has helped moderate the negative rating bias across REITs and commercial real estate financial companies,” S&P Global Ratings said.
Homebuilders are facing slower demand due to affordability challenges and rising supply, while mortgage rates remain elevated.
“Cost headwinds and weaker demand are weighing on building materials companies, and we expect the negative rating bias to grow in the next year,” S&P Global Ratings said.
In the report: Real Estate Monitor: Credit Quality Is Holding Up Amid Economic Headwinds,” S&P Global discusses the rating and outlook trends for the real estate sector.
“We believe the real estate sector's credit quality remains resilient, and prospects for a rate cut should support asset values and drive a firmer recovery in transactions,” the company said.