New York City ranks number 12 in the National Retail Index.

Marcus & Millichap Real Estate Investment Brokerage Company recently released its National Retail Index, which shows that New York City placed No. 12 in the rankings, as employment losses in the finance industry dampened Manhattan's economy retail market fundamentals. The NRI is a snapshot analysis that ranks 38 retail markets based on a series of 12-month forward-looking supply and demand indicators.

New York City's No. 12 ranking was down two spots from the previous year. However, improving fundamentals are expected to give the Manhattan retail market a lift by the end of the year.

Washington, D.C., ranked as the top retail market in the nation for the second consecutive year due to its compelling demographics and reliable economic engine fueled by the public sector. Rounding out the top five were Orange County, Calif., (No. 2), San Diego (No. 3), Boston (No. 4) and Fort Lauderdale, Fla., (No. 5).

The top-ranked investment markets are typically characterized by low vacancies, prospects for rental growth, limited new development, and solid employment and household growth. High vacancy rates and a lackluster economic outlook contributed to Cleveland's ranking (No. 38) at the bottom of the index. Las Vegas made the biggest jump in the year-over-year standings, climbing 10 spots to No. 13. The gaming capital sported the highest expected employment and household growth rates among the 38 markets surveyed. The Seattle market suffered the biggest slide in the NRI, falling 18 spots to No. 30, primarily due to the area's economic and employment setbacks.

Following are some of the most significant details regarding the New York City market:

An anticipated rebound in employment failed to materialize in 2002, and Manhattan ended the year by losing 0.6% of its work force;

Local employers will add to payrolls in 2003, with job growth of 0.9% forecast for the end of the year;

Vacancy inched higher in 2002, ending the year at 6.2$, largely due to steady completions totaling 2.2 million SF.

The struggling economy and an abundance of space will cause vacancy among Manhattan retail properties to rise slightly in 2003, to 6.4%.

As the market continued to absorb vacant space, average rents were unchanged in 2002, at $61 per SF.

Asking rents are forecast to rise to $61.92 per SF in 2003. Astronomical rents and retail spending in upscale Midtown shopping areas will remain strong.