WASHINGTON, DC—Vacancy rates will tick downward over the course of the year as demand gradually picks up—except in the case of multifamily, clearly the best performing sector. However, storm clouds may blow in from across the ocean, says the National Association of Realtors in its latest quarterly commercial real estate forecast.

“Sluggishness overseas alongside a strengthening US dollar will widen the trade deficit and slow economic growth potential,” says NAR's chief economist, Lawrence Yun.  Even so, he adds that domestic GDP growth is expected to come in at around 3%, the highest rate since the recession. “Improvements in housing and commercial real estate market activity will measurably help economic growth.”

As for CRE market activity, improvements in hiring are expected to drive up demand for office space and therefore lead to a national vacancy decline of one percentage point. For retail and industrial, the vacancy declines are expected to be a bit larger, at 0.3% and 0.4% respectively.

Apartment vacancy is expected to tick upward by 0.2% by the first quarter of 2016--but that's actually evidence of the sector's strength, since the uptick will stem from an increase in supply rather than a decrease in demand. NAR expects multifamily vacancies to remain comfortably below 5% even amid the uptick, leading to projected rent growth averaging 3.7% this year and 3.6% next year, the fastest growth out of the commercial sectors covered in the NAR report. Moreover, Yun notes that in many metro areas, rent growth easily outpaces inflation.

For office, rents are expected to rise by 3.3% in 2015 and 3.6% next year. Net absorption of office space is forecast at 47.7 million square feet for this year and 58.3 million in '16. Industrial rents are expected to rise at a slower pace—3.0% for '15 and 3.1% the following year—but industrial net absorption for either year will nearly equal the total amount of office space expected to be absorbed over the next two years.

Retail's rent growth and net absorption are both pegged at lower levels of achievement for this year, but are expected to begin powering up in '16. Rent growth for retail is projected at an average of 2.5% in '15 versus 3.1% in '16, with predicted net absorption of 20.6 million square feet in '16 representing an improvement of about 30% over '15 levels.