NYC real estate: been there, seen it, done it.

One thing about working in New York City commercial real estate is that you've seen everything, probably at least once, and you'll probably see it again if you stick it out.

Real estate is this city's true oldest profession, despite any similarities or references to its other oldest profession. Manhattan came into being as one of the best real estate deals ever, if not the biggest, relatively speaking, even if you count the sale of the MetLife building and even if you use today's dollars.

Manhattan commercial real estate has had its share of drama--it just hasn't had much lately.

Stories on the conversion of office properties to apartments have been ubiquitous--but it's not a new trend: according to statistics, residential conversions have been underway in a big way since 1995, with nearly 70 occurring in the last 10 years. That 10 more are proposed in the near future is the real estate profession's answer to lackluster office leasing and ever-present housing demands.

Whether Manhattan will participate in a predicted bursting of the housing market bubble seems less likely than continuation of our field-of-dreams history: build it and they will move in.

The West Side stadium is moribund, though real estate development in its place will be active even if it's not controversial. The 2012 Olympics are now a longer shot than they were before for New York City, though the general consensus is that the Mets do need a new stadium; but, c'est la vie.

Long Island City is being positioned as the new answer to Midtown rents--just as Midtown South was the affordable alternative after the tech-wreck and just as Downtown should be, but is not, despite restoration of transportation and beautiful, bountiful Class A space for less than $37 per square foot.

But the real story in the Manhattan real estate market is that there just isn't much of a new story at mid-year 2005.

Still, any movement has been mostly in the right direction. While overall availability in Manhattan didn't budge between April and May this year, remaining at 12.1%, it has declined 1.2% (from 13.3%) since May 2004.

Overall average asking rents have shown greater positive movement month to month, rising nearly $1.50 per square foot (to $53.48) between April and May, and nearly $5.50 per square foot since last year at this time when they averaged $48.29.

Absorption in Midtown was lower in May than April, but by only about 3,000 square feet. Nearly 950,000 square feet were absorbed in April and again in May--compared to just 123,549 square feet absorbed in May 2004. Year-to-date absorptions (2.85 million square feet) are well over half of the total space absorption (4.1 million square feet) for all of 2004. And absorptions in Midtown South--at 2.08 million square feet so far in 2005--are not far behind Midtown, despite an unimpressive though stable availability rate of 11.9%.

Average rents for Class A and B properties are within 20 cents of each other at $35.56 and $35.36, respectively, in Midtown South, up a couple of dollars each since May 2004.

Gains are marginal at best Downtown.

Class B asking rents rose $.31 from April to May while everything else slid: availability went up two-tenths of a percent and Class A rents dropped $.78.

The good news is that space is being absorbed Downtown--156,409 s/f in May after a gangbuster April when nearly 600,000 s/f were absorbed--with less than 200,000 s/f coming back on the market so far in 2005. Compared to the 1.3 million-square-foot deficit in absorption in 2004, it's not horrible.

But remember those 10 proposed residential conversions on the boards this year? All of them are Downtown. Space is going Downtown, and that's a good thing; people are moving in and spurring demand for services, which will invigorate the retail market.

ELIZABETH HAUKAAS, DIRECTOR, CLIENT SERVICES, GRUBB & ELLIS NEW YORK.