LOS ANGELES—Notwithstanding a bout of severe winter weather across much of the country, US commercial real estate fundamentals continued to improve in the first quarter, according to a CBRE Group report released Tuesday. “Sentiment suggests that companies are looking forward to future demand and beginning to respond with expansion plans,” says Jon Southard, managing director of CBRE’s Econometric Advisors group.

CBRE’s analysis of strong Q1 recovery, and continued improvement for the balance of 2014, dovetailed with a report Tuesday from the International Monetary Fund revising its estimate of global growth upward from 3.6% to 3.7%. Leading the way will be the US, according to IMF.

Accordingly, the US office sector—although showing smaller vacancy declines in Q1 from a basis-point perspective than other property types—has been trending in the right direction, and CBRE expects vacancy to drop to 14.3% by the end of Q4. Thirty-four of the 63 markets the firm tracked saw improvements during the quarter, with some of the smaller markets (Baltimore, San Antonio and Stamford, CT) seeing vacancy drops of 120 bps or better. Overall, vacancy improved by 10 bps during Q1.

“The strength in private sector employment has been a key factor supporting demand for office space and is expected to remain strong throughout 2014,” says Southard. “The total private employment growth average of 182,000 jobs per month in the first three months of the year is a positive sign for future office space demand, especially with professional and business services — a key office-using sector — leading the way.”

By contrast, industrial‘s availability rate dropped by 20 bps during Q1, and that was the smallest quarterly decline in a year and a half. However, CBRE sees in that relatively small quarterly improvement evidence of the industrial recovery’s maturation, as development has begun picking up.

Yet the uptick in construction is also a positive sign, Southard points out. Further, he says, “There are a handful of markets that are already fully recovered or very near that mark, which will lead to stronger rent growth in the coming quarters,” exceeding previous peaks in some cases. The sector is expected to finish the year with availability of 10.8%.

Still elevated compared to its previous low point is retail availability,which dipped below 12% for the first time since early 2009. However, at the end of 2005 it was as low as 7.4%.

CBRE says the cities with the greatest year-over-year availability decline in Q1 were Fort Worth, Pittsburgh, Dallas and Tucson. The retail sectors in Salt Lake City, Chicago, San Francisco and Jacksonville were at the opposite end of the spectrum. CBRE maintains its forecast that the availability rate for neighborhood and community shopping centers will decline to 10.6% by year’s end.

Multifamily, still the sector with the highest investor demand as well as the greatest development activity, saw its vacancy rate decline 20 bps to 4.9% compared to Q1 2013. This is below historical norms, and CBRE notes that demand nationally is growing at a rate of 1.6% on an annual basis, a faster pace than the market has seen historically.