Retail resurgence continues to sweep Manhattan.

It doesn't take a real estate broker to notice the retail resurgence around Manhattan.

Since last year, activity in Manhattan's retail market can only be described as "explosive." Despite continuing layoffs and a shaky economy, large chains and smaller retailers will continue expanding in Manhattan for the remainder of the year, driving retail rents upward.

In fact, stores are expanding by leasing major space in almost every area of New York City, and Manhattan continues to become one of the nation's most competitive superstore markets. Today, the superstore phenomenon is growing by leaps and bounds, and it's difficult to keep track of the openings all over town.

In addition to Barnes and Noble and HMV Records, major players in the superstore market include Daffys, which opened on two floors in Herald Center; K-Mart, which signed a lease at One Penn Plaza for a 140,000 square-foot store; Herman's Sporting Goods, which leased its flagship store in Rockefeller Center; and Modells sporting goods, which leased the former Plymouth Shops space on 42nd Street across from Grand Central Station.

Uptown, Today's Man opened in 30,000 square feet of space at 521 Fifth Avenue; Nike is building in the 80,000 square-foot space vacated by Galleries Lafayette in Trump Tower; Liz Claibourne has a store under construction at 650 Fifth Avenue; and Disney signed a lease for 711 Fifth Avenue.

In addition, expansions are planned by such major retailers as TJ Maxx, Loehmanns, Filene's Basement, Burlington Coat Factory, Staples, Daffy's, Toys R Us, and Speedo. Smaller space users that are currently expanding, include Nine West Shoes, Au Bon Pain, Duane Reade Drugs, C.V.S. Drugs (a division of Melville), Cosmetics Plus, Bostonian Shoe, Osh Kosh B. Gosh, French Connection, GNC, and countless coffee bars.

We are seeing a tremendous amount of activity in a wide variety of neighborhoods. In traditional high-end retail markets, such as Fifth Avenue, Madison Avenue and 57th Street, rents continue to rise, but the retail resurgence is especially dramatic in areas that had vacancies for many years.

For example, Sixth Avenue below 23rd Street continues to attract new retail tenants such as The Burlington Coat Factory, Old Navy (owned by The Gap), and Staples.

The area around Union Square is starting to heat up, with Bradley's opening, Caldor Department Store rumored to be signing a lease nearby and a Barnes & Noble under construction on 17th Street.

The expansion of established retailers and the influx of new retailers to New York City has driven rents up as much as 10 to 15 percent in Midtown Manhattan. In most uptown areas in New York City, retail rents are up approximately 10 percent from last year, and space is already tight on Fifth Avenue in the 50s.

Retailers continue to lease space despite continued economic uncertainty. In 1994, there were 250,000 fewer jobs in New York City than in 1989. Mayor Giuliani eliminated 15,000 jobs during his first year in office and it is rumored that Wall Street will layoff as many as 10,000 people this year. Salomon Brothers and Merrill Lynch have announced impending cutbacks, while a host of bank mergers, specifically the merger of Manufacturers Hanover Trust and Chemical Bank, have eliminated thousands of jobs.

However, the first half of 1995 pointed to more space absorption than any previous year in memory. In the second half of 1995, we will see even more retailers entering the New York market, and rents will continue escalating as prime retail sites dry up.

1995 FRIEDMAN REPORT

                        Rental Range

Lower Manhattan        $ per sq. ft.

Broadway                    $80-$110
Nassau St.                  $65-$110

Fifth Avenue

34-42nd                     $85-$115
42-50th                     $110-175
51-59th                     $300-500

Madison Avenue

42-50th                    $110-$125
51-60th                     $125-250
61-72nd                    $200-$275

Lexington Avenue

42-57th                    $100-$125
57-61st                     $150-200

Third Avenue

42-57th                     $85-$110
57-61st                    $100-$125

Broadway

72-95                       $75-$100

Columbus

67-96th                     $65-$100