The Index rose 0.1% in Q4 to 120.1, from 120.0 in the previous quarter. It is 1.8% above the 118.1 that registered the same time period last year.

"Growth is leveling off," Scott MacIntosh, senior economist tells GlobeSt.com. "The good news is it is not declining so we will still see fairly good absorption this year."

NAR expects net absorption of space in the office and industrial sectors to be steady over the next six to nine months, reaching five million to 15 million sf in Q2 2007, with about $315 billion to $320 billion in new, completed commercial construction activity. This compares to the $311 billion of new construction recorded in the Q4 of last year.

It also expects that leasing and sales activity in Q2 will be approximately 1.8% higher than the same time period in 2006.

MacIntosh says that macro economic conditions will continue to support the industry. For instance, "the amount of global trade going on is just staggering now, which requires more warehouse and industrial space."

That said, there have been clear shifts in real estate development patterns as the growth rate slows, he adds. "We are not seeing a lot of speculative development anymore. Instead, we are seeing more build-to-suit development, especially in markets where absorption is relatively strong."