Long-awaited retail turnaround finally arrives.

It seemed as though it might never happen, now it seems as though there's no end in sight. Retail leasing activity began a few years ago as a trickle and in 1994, it finally became an avalanche!

To call 1994 an unusual year for the retail real estate industry might be the understatement of the decade. In fact, the expansion of retail tenants was explosive. The trend that began when Barnes and Noble opened its first megastore continued this year at a ferocious pace.

Almost every area in New York City benefitted from the influx, with a few areas experiencing the most dramatic turnarounds.

The opening of Bed, Bath & Beyond on 18th Street set off a chain reaction that has transformed Avenue of the Americas below 23rd Street into a major retail area, with a Barnes and Noble superstore on 21st Street, Today's Man on 19th Street, and TJ Maxx in the space above Bed, Bath and Beyond, which continues to expand.

Hardly any retail space remains available on this architecturally beautiful street where vacancy followed vacancy just a few years ago.

On 14th Street, Union Square has seen an incredible revitalization. The 1994 Christmas season was a flurry of activity as shoppers rushed from the new Bradlees discount store to the Wiz, Herman's and Toys R Us in Kiddie City's former space.

In fact, Manhattan has become one of the nation's most competitive superstore markets. The trend began with stores like Tower Records, which practically invented the superstore concept with its vast array of CDs, books and videotapes. Today, the superstore phenomenon is growing by leaps and bounds.

Barnes and Noble now has superstores on Broadway and 83rd Street, Lexington and 86th Street, 105 Fifth Avenue, 600 Fifth Avenue, and recently opened superstores on Astor Place and at the Citicorp Center.

HMV Records has opened superstores on Broadway and 72nd Street and at 86th Street and Lexington, and has plans to open two more on the northeast corner of Broadway and 34th Street and at 565 Fifth Avenue. Coconuts, the record store that normally leases 5,000 square feet, opened a more than 20,000 square-foot store in Rockefeller Center, and is currently seeking space in the Flatiron District.

It's difficult to keep track of the megastores opening all over town. Daffys just opened on two floors in Herald Center; K-Mart signed a lease at One Penn Plaza for a 140,000 square-foot store; NBO opened in the former Gap space on 42nd Street between Third and Lexington Avenues; and Modells sporting goods took the former Plymouth Shops space on 42nd Street across from Grand Central Station.

On Madison Avenue, new stores include Joseph A. Banks, Crate & Barrel, and Calvin Klein. On Fifth Avenue, Liz Claiborne is opening on 52nd Street; Banana Republic will open in the former JAL space; Comp USA opened at 420 Fifth Avenue; Today's Man is building a new store at 521 Fifth Avenue; and Disney will open at the northeast corner of Fifth Avenue and 55th Street.

On 57th Street, Nike leased the former Galleries Lafayette space, Tower Records is opening in Trump Tower, and Daffys leased the former Place Des Antiquaries space near Lexington Avenue.

On the West Side, Virgin Records is opening the world's largest music store at 1540 Broadway, Sony Theaters opened a huge movie theater near Lincoln Center and will soon be joined by a new Barnes & Noble and Coconuts. On Seventh Avenue, Sports Authority opened across from Madison Square Garden, and there is speculation that Caldors will soon sign a lease in this area.

Smaller retailers are thriving as well. New locations are springing up for Nine West Shoes, Bostonian Shoe, Cosmetics Plus, Duane Reade, Osh Kosh B. Gosh, and French Connection, to name a few. And, of course, the coffee bar phenomenon continues, with a host of major and minor players, such as Timothy Coffee, Pasqua, New World Coffee and Starbucks.

The bottom line for all of this activity is more space absorption in 1994 than in any previous year in memory. This is true for every major retail area, as well as smaller, neighborhood markets, despite the continuation of major layoffs in the securities and banking industries.

In 1995, we will see even more retailers entering the New York market. As a result, the city will experience the decade's first shortage of good prime retail sites and rising rental rates.

For those of us in the brokerage business, it's just another example of how all bad cycles come to an end. For the past few years, Manhattan's vacancy rates have seemed to soar out of control. Now we face a new challenge: how to find space in a tightening market. For all of us, it's a happy challenge for 1995.