Though commercial real estate transactions decreased significantly in Q1, industry experts say the outlook remains healthy for capital markets.

Deal volume fell 18.5% to $108B compared to the year-ago quarter, Ten-X says in its CRE capital markets report. “A first-quarter slowdown in transactional volume was predictable, as investors traditionally push to get deals on the books by the end of the fourth quarter,” Ten-X Research chief economist Peter Muoio says.

Check out how the five real estate sectors—office, industrial, hotel, multifamily and retail— fared in Q1. 

Hotel

As the 10-year Treasury’s rates dropped to 1.89% in Q1, risk premiums are on the rise, particularly in hotel investment, which posted a 6.6% increase—amounting to the highest risk of any sector. Ten-X predicts Treasury rates will remain flat in the future amidst global market volatility, the oil slump and job growth concerns.

Industrial

Industrial’s risk premiums are also on the rise as it increased by 120 bps in Q1 to 5.6%. And though the Treasury rate fell, Q1 cap rates showed modest declines across all segments, particularly in industrial, which rose to 7.9%, an increase of 70 bps.

Office

Office cap rates showed modest declines, dropping to 6.58% from their 7.2% 10-year average. The segment is noting a boost in investments as landlords move to urban areas to grab the tech-savvy Millennial.

Retail

This segment is leading the way in terms of pricing growth, posting yearly gains of 9.5%. It has also outpaced its 10-year average for overall transactional volume by 33.2%, though the segment must still account for retail industry struggles as large chains face competition from e-commerce gains.

Multifamily

Multifamily was the only sector to beat its 10-year average in deal volume by 950 bps. It accounted for 36.4% of the quarter’s shared $108B in transactions, an indicator that investors remain optimistic about the sector despite rising apartment vacancies.