No need for landlords to curb their enthusiasm.

While financial institutions across the U.S. continue to struggle, and the supply of bad news from the housing market seems endless, I am happy to report that retail real estate on the island of Manhattan continues to flourish.

Why the amazing disconnect between New York City retail and the rest of the sectors? It's simple; this island of 8 million people is not getting any bigger, and the masses of people who live here and work here--along with the droves of tourists that arrive on a daily basis--need places to shop.

And while rents for other types of real estate tend to be volatile, retail rents don't waver quite as much.

Yes, there have been some markets that rise in popularity quickly and then fade out (does anyone remember Columbus Avenue in the mid-80s?). But for the most part, retail rents in Manhattan have continued to climb on a steady basis for the past 20 years.

And while the recent drugstore and banking wars may have temporarily raised prices in the retail market, the slowdown of both those sectors will lead to a market correction, which will bring the market back to where it should be. Part of the reason for this retail phenomenon is that when the economy begins to falter, there is an entire segment of value and discount retailers who are able to jump in and take the place of the luxury retailers who enjoyed the riches of a thriving economy.

A good example of this occurred in the early 90s, when there was a market crisis similar to today's underway.

Up until then, Fifth Avenue, with the exception of a branded store here or there, was still considered the street that was home to the utmost in luxury. But the market shifted; consumers grew less willing to spend extravagantly on clothing; and enter the Gap, which secured the corner of 54th Street and Fifth Avenue.

The retailers who line the streets of Manhattan generally are a microcosm of what is happening economically throughout the country.

When you see luxury retailers everywhere, you go (think Coach and Burberry), including streets where they typically never would have located a store, that's a pretty good indication that everyone is making money and feeling good. Start to notice more value-oriented retailers cropping up (think H&M and Uniqlo), and there's a good chance that people are taking in their belt another notch, and focusing on saving a bit more rather than spending.

The good news is that Manhattan retail is resourceful and resilient. And for every category or national firm experiencing a slowdown, there are new categories and new international companies willing to pounce on the opportunity to make a retailing name for themselves in New York City.

BY JEFFREY D. ROSEMAN, EXECUTIVE VICE PRESIDENT AND PRINCIPAL, NEWMARK KNIGHT FRANK RETAIL