All of the signs are positive for 2004.

On the heels of one of the most successful REBNY banquets in memory, with a sellout crowd full of buzz about the market, I can say with confidence that 2004 is looking to be a good year. From the speakers on the dais to the guests bustling about the main floor, everywhere you turned, there were positive stories being told about the New York real estate market. The top leaders in real estate are seeing positive signs for 2004.

Commercial Sector

Recent reports echo the general sentiment among brokers that commercial rents have stabilized. The national economy has picked up, having a positive impact locally. The expected in jobs in the first half of this year is also good news for the commercial real estate sector. More jobs means more people, and more people means more office space will be needed for New York businesses.

New York continues to be the city that attracts and keeps businesses. With the quality and location of real estate in New York City, this is where businesses want to be. Retaining business is linked to successful efforts to reduce the crime rate. New York is the safest large city in the country. And our city government continues to address quality of life issues, constantly striving to make New York a better place to live and to work.

Optimism Abounds in '04

REBNY's members are optimistic about the year ahead. Major economic development efforts will forge ahead to bring positive changes, the foremost of these projects being the rebuilding of Lower Manhattan. A great deal of progress has been made in helping the area recover from 9-11. Most importantly, designs have been selected for the memorial at the World Trade Center site and the Freedom Tower, with construction soon to be underway. These are major strides.

Plans continue as well for rezoning of the West Side and the expansion of the Jacob Javits Convention Center. In addition, zoning changes in the boroughs will spark new development. In Brooklyn, rezoning in Downtown Brooklyn and the Greenpoint waterfront will drive commercial and residential developments. In Queens, the rezoning of Long Island City and Jamaica will result in new developments that also will provide major economic benefits for borough.

Highlights of 2003

While we look ahead to the future, we also reflect on the successes of the past year. REBNY was involved in major legislative issues that affected our industry in 2003. We lobbied to create a lead paint bill that makes sense for our city. Although the City Council recently passed what we call "the most onerous lead paint bill in the United States," we fully supported Mayor Bloomberg's veto of this bill. We will continue to explore all options to protect owners' rights when it comes to lead paint issues.

In addition, an agreement has been made to extend the Relocation and Employment Assistance Program (REAP). The program encourages businesses to relocate to expansion areas in the boroughs outside Manhattan and north of 96th Street by offering financial incentives. REBNY has supported the program since its inception and we believe it will help New York keep a competitive edge with New Jersey's growing amount of commercial space.

REBNY also supported the creation of a new manufacturing policy this year and released a white paper on the subject in June. The study, known as "Zoning and Manufacturing: A Balanced Approach to New York City's Growth," calls for a growth-oriented policy to encourage manufacturing employment, and including a mix of economic stimulants such as tax and financing incentives, relocation assistance, and real estate ownership programs. We continue to push for change in this area.

REBNY also had a hand in legislation announced in September by Mayor Bloomberg and the Department of Buildings to improve building safety. Members of the real estate community have worked with the administration since 9-11 to determine changes that need to be made to our building code. The proposed safety upgrades in commercial buildings included retrofitting high-rise office buildings with sprinklers over the next 15 years, full-building evacuation plans in addition to the current requirement for fire plans, improving exit signage and ensuring back-up power for exit signs.

REBNY's members kept abreast of the market in 2003 with the help of our reports on the retail and residential sectors. REBNY's most recent retail report released in the Fall is the only report of its kind in the Manhattan market, thanks to the participation of our member retail brokers. The report noted many positive signs in the market and showed a surge in retail rents in primary shopping corridors, including an increase of 39 percent in asking rents for Madison Avenue between 57th and 67th Streets. Overall, average asking rents for available retail space increased 8.2 percent from the year before. The report is evidence that retailers continue to invest in Manhattan and are willing to pay top dollar to be in the prime retail corridors like Fifth Avenue and Madison Avenue.

The residential sector has had a strong year as well. According to the most recent REBNY reports for cooperatives and condominiums in the third quarter, Manhattan cooperative and condominium prices remained steady, with prices in some sectors up slightly or unchanged from the previous year. In addition, the number of cooperative sales recorded in the quarter jumped 51% from the same time the previous year, clearly an indication that potential homeowners continue to have interest in owning cooperatives in Manhattan.

As we embark on 2004, I also must make note of the appointment of John E. Zuccotti as our new chairman. We're thrilled to have a leader who has an extraordinary background and long history working in our industry and in this city. His distinguished career and the experience he brings will serve the Board well.

Through our reports, our many successful industry events and legislative victories in 2003, we know the industry is very much alive and well. I salute the efforts of our members to improve our industry and encourage them to get out there and make deals in 2004. Though the past several years may have been a struggle, we're looking forward to a year ahead of good things for the real estate industry.