But "never underestimate American consumers. If they can, they will find a way to keep spending," says Robert Bach, senior vice president of the real estate firm's research and client services. Overall, he predicts lower construction and absorption levels for the sector.

In rating the best markets for investors, Bach picks the Washington DC area at the top of this list because of its high median incomes, followed by the Dallas, Los Angeles, Houston and Las Vegas markets. Other metro areas to watch are Atlanta, Chicago, California's Inland Empire, San Diego and Phoenix, he says.

Meanwhile, leasing rates for commercial real estate overall should improve as there is less overbuilding in the industry, the report says. Cap and interest rates are also expected to remain stable.