The performance of the overall commercial real estate sector will continue to improve throughout the year, but at a slower pace due to persistent economic concerns, analysts noted.
Sector fundamentals will drive improving market conditions, making a significant rise in losses on loans backing CMBS unlikely, according to Moody’s Investors Service.
"Commercial real estate continues to benefit from limited construction and positive absorption, which have supported a positive market dynamic despite lingering concerns about the strength of the economic recovery," said Michael Gerdes, Moody's Managing Director and Head of US CMBS & CRE CDO Surveillance.
He added, "As in the fourth quarter of 2012, multifamily and hotel both performed strongly and will continue to do so over the next year, albeit at a more modest pace. The recovery of office and retail has been more muted, but performance will strengthen in tandem with employment and economic growth."
The multifamily sector is expected to experience moderate growth for the remainder of this year.
The vacancy rate for the first quarter of 2013 was 5.1%, the same as the first quarter of 2012.
Additionally, 15 markets had a vacancy rate of less than 4%, including Miami and Newark — both of which boasted vacancy rates of less than 3%.
Meanwhile, rentable units increased at an annualized rate of 2.9% for the first quarter, compared to 3.4% from the fourth quarter of 2012.