Income drivers for U.S. commercial and residential real estate were as strong as predicted in the first quarter of 2022, with multifamily and industrial doing particularly well — but the remainder of this year and 2023 aren't so certain, and the well-battered asset classes would likely bear the brunt of an economic downturn while the rich get richer.

The coming quarters will see "an upswing in risk ... given tightening monetary policy and the ongoing Russia-Ukraine military conflict," according to a new report by Moody's Analytics titled Entering the Danger Zone: The Outlook for CRE and Housing.

"We have tried to avoid using the 'R' word in this paper, but the chances of a recession have indeed risen versus baseline," the report says.

Moody's Analytics now expects a 33% chance of a recession beginning this year and a 50% chance of one beginning sometime in 2023.

Even so, the report says that demand for multifamily will remain strong for now, especially as home prices and mortgage rates rise, keeping would-be buyers in their apartments.

"We are expecting rent growth to slow from its record-breaking pace in 2021, but if the sector pulls off another year where rents grow between 5% to 6%, that will be a good year indeed," the report says.

Industrial will also remain strong despite the risk of recession, Moody's Analytics predicts, but there are some headwinds, such as Amazon's plans to put 10M SF of warehouse space up for sublease.

Much of the pain of an upcoming recession will be in office and retail, just as it has been since the beginning of the pandemic, the report predicts.

The report's authors also suggest that higher mortgage rates, along with prices that are simply too high — especially for first-time homebuyers — will finally put the brakes on the demand for housing that the pandemic put into overdrive. The report stops short of characterizing the housing market as a bubble, however.

"So while demand [for housing] will moderate, it will not completely collapse," the report says. "There is currently a severe housing shortage ... [and] additional supply will not flood the market as it did before the Great Recession."

The report predicts "moderate" declines in house prices over the next few years.