The report, which features data collected from CCIM members, national data sources, and research and commentary fromLawrence Yun, Ph.D., NAR chief economist, and George Ratiu, manager of NAR's quantitative and commercial research, shows fundamentals improved through the first quarter of 2013, with declining vacancy and rising rent across the office, industrial, multifamily, and retail sectors.

Vacancy rates for office properties hit 15.7 percent at the end of second-quarter 2013 and were accompanied by a 2.6 percent rise in rents. Vacancy rates remain on a downward course for the industrial sector as well. Availability rates dropped to 9.4 percent and rents rose 2.4 percent.

In the apartment sector, vacancy rates are expected to decline from 3.9 percent in the second quarter to 3.8 percent by the fourth quarter, and rent is expected to rise 4.6 percent. With consumers staying the course in the first half of the year, retail spending boosted demand for space. Availability rates declined to 10.5 percent in the second quarter and rents grew by 0.4 percent.

Due to improving fundamentals, investors are finding commercial investments increasingly attractive. More specifically, 63 percent of CCIM members surveyed said current credit conditions are also expected to improve. The interest has translated into an upbeat sales pace for commercial properties during the first part of the year. In first-quarter 2013, transactions of major properties totaled $74.2 billion, a 37 percent increase year over year, according to Real Capital Analytics. Meanwhile, sales of properties valued under $2.5 million rose 5 percent on a yearly basis, based on data from the National Association of REALTORS®.

"Given the positive increases in demand and steady economic performances, commercial fundamentals will likely stay the recovery course," said Ratiu. "With demand for rental housing projected to remain strong and moderate gains in employment and consumer spending, absorption for office, industrial and retail spaces will continue rising, pushing vacancy rates lower."

The Rising Star: Apartment Sector

The apartment sector remained the bright star based on CCIM members surveyed, while industrial and retail also maintained favorable conditions. Furthermore, 60 percent of CCIM members indicated more deals through May 2013 compared to the same period in 2012.

However, the apartment sector could be too bright going forward, as it carries very low capitalization rates, exposing it to vulnerabilities once interest rates start to rise. While fundamentals are currently solid, the availability of apartment financing through Fannie Mae and Freddie Mac may cause price escalation through year-end.

Secondary Markets Continue to Improve

In a sign of the market's continued rebound, 19 metropolitan markets surpassed the $1 billion sales volume threshold year to date. New York City retains the top spot, followed by the Washington, D.C., and Los Angeles. However, the broad-based growth in commercial deals was highlighted by strong sales activity in secondary markets, including Houston, Denver, Phoenix, Seattle, and San Diego.

The complete report findings can be found at http://www.ccim.com/resources/qmt-second-quarter-2013-quarterly-market-trends.