Retail boom presents serious challenge to brokers.

Retail leasing continues to be very active throughout Manhattan, despite the fact that rents are higher and available space is tighter than at any time in the past 10 years. That means that now is the time for the creative broker to come to the surface.

When the market is slow, it's a lot easier to make deals. In a market like this, you have to be like a runningback in a football game: you look for holes to open up, and when you see one, you have to react at top speed.

At present, the biggest challenge is finding space for the various chain stores that are trying to build their presence in Manhattan. These range in size from the monsters like Borders or HMV, to mid-size bath and beauty shops, to little sunglass boutiques. They all want not just to be in Manhattan, but to be here with as many units as possible. Retailing in Manhattan, where people aren't used to driving miles from home to get to a certain shop, is like running a cable TV station: you make your mark through saturation.

As space gets tighter all over Manhattan, we're finding that many of the traditional "use group" pockets are shifting or becoming diluted. You'll still see neighborhoods that are known primarily for one merchandise category or another, such as antiques, bed and bath, jewelry or high-fashion clothing, but on the whole, newcomers are going wherever the space is, and a few of the old established players have recently been forced to switch neighborhoods. The result, overall, is that many neighborhoods are becoming more diversified in their retail mixes.

This has its good and bad points. It's good, in that no neighborhood has to stand or fall on the success of one industry or category; it's potentially bad, in that certain neighborhoods could lose their individual charm by becoming just like the rest of the city. It's largely up to the individual retailer to maintain the unique charm and character of each neighborhood it enters, and perhaps it's up to the broker to ensure that the tenant will enhance that neighborhood. Finding the right fit is, more than ever, the Manhattan-based retail broker's biggest challenge.

Will there ever come a point where the market goes right over the top? That's possible, but I don't see it happening just yet. After all, although the rest of the country is experiencing an economic boom, and although New York City's quality of life has improved dramatically in the past few years, we mustn't forget that we're actually lagging behind the rest of the country in economic terms. Unemployment is still relatively high here. It's entirely possible that the local economy still has a few more years of improvement in it, which means more spending by locals and tourists alike, which means that retailers will continue to be willing to pay whatever rents they have to pay to be here.

Certain neighborhoods that are known for their high-end retailing probably have peaked, simply because there's no space left. Madison Avenue in the 60's, 70's and 80's; and Fifth Avenue from the Public Library to the Plaza, are full to bursting with tenants who are paying rents that nobody could have imagined a few years ago. Just ask yourself how many of those infamous "going out of business" stores are left on Fifth Avenue these days, and you'll get an idea of how dramatically Fifth has come back.

Even during the best years of the last boom - the mid- to late-80's - most of us figured that Fifth Avenue would continue to get a little seedier every year, and would certainly never regain the cachet it had in the first half of this century. Thank goodness we were wrong!

Soho, which really came into its own as a fashionable retailing neighborhood during the last retailing boom, is now nearly a mature market, with rents approaching those of Fifth and Madison avenues, and few vacancies.

Naturally, the most fashionable, upscale retailers are getting the most publicity as they move into Manhattan, but the discount chains are, if anything, making an even bigger statement, coming in wherever they can find space. Could you have imagined 10 years ago that K-Mart would ever dare to come in here? Now it has two high-profile locations and may add more. Women's and men's discount clothiers seem to be doing just fine wherever they find space in Manhattan.

All this demand for space has created whole new retailing districts in neighborhoods that until just recently were considered secondary or "fringe" markets. Neighborhoods like Little Italy and the Lower East Side are suddenly chic. Where respectable people simply didn't go, once upon a time, the atmosphere now is a little like the Left Bank of Paris.

Lexington and Third avenues, from Grand Central up to East Harlem - straggling areas for 20 years and more - are finally hot. The 30 blocks above Bloomingdale's have always featured a sprinkling of fine restaurants, but today, relatively new entries such as Vong and Mesa City have made the Upper East Side an even more fashionable destination for the young and prosperous. There, plenty of retail space is still available, at fairly painless rents, and high traffic is guaranteed.

Columbus Avenue, from 59th to 110th streets, enjoyed a brief vogue in the late 1970's and early 1980's, but the bloom was off the rose there well before the crash of 1987.

Now, Columbus is on the comeback trail, with a wide assortment of national chains and single-unit retailers.

The bottom line: while a few pockets of retail space are completely full, plenty of opportunities remain.

(Garrick-Aug' Faith Hope Consolo can now be seen on the Internet, including the popular retail column "The Faith Report," and listings with color photographs of storefronts and recent news articles on the retail market Her home page is: http://www.faithconsolo.com. Her e-mail address is: faith @faith-consolo.com)