Retailers are becoming more sensible this year.

It seems like just yesterday that I wrote the last mid-year report. Back then, I saw a "correction" in the real estate retail market, but no impending disaster. In fact, we were busier than ever this past quarter. High-end international tenants that held back around the New Year have assessed the current situation and are readdressing their desire to secure a New York City presence. We find that there is more space available, making: it easier to do deals, but the deals in the prime areas are still aggressive. According, to a source at a major Madison Avenue flagship boutique, business on Madison Avenue is up substantially this year. Many upscale boutiques are now questioning 'where to position initial New York City stores. Does a company introduce a brand in the Plaza District (Madison Avenue, 57th Street, Fifth Avenue), or do they open in Soho? With Ferragamo, Cartier, Lancel, Movado, Hilfiger, Nautica, Charles Jourdan, Gant and many other fashion tenants building new stores in SoHo, the area. is certainly attracting the attention of the luxury brand retailers. Alternative areas such as NoLIta, TriBeCa and the Meat Packing District continue to expand and gain popularity with those tenants for whom SoHo is either becoming too commercialized or too costly.

Uptown in the Plaza District, names like Prada, Gucci, Chanel and LVMH, among others, continue to expand their presence. Herald Square/ 34th Street gets better everyday and offers multiple opportunities to lease large blocks of retail space, which once leased, will further determine the direction of retail on 34th Street.

Grand Central is vibrant with a new Benetton flagship due to open in the Chrysler East building. Times Square continues to amaze with the Toys 'R' Us deal, the buzz of the town. Victoria's Secret is building new stores on both the Upper East and West Sides (East 86th Street and Broadway/85th Street). The chain stores in general are looking carefully at deals and are again, considering expanding in New York. For a time, early in the year, most put the brakes on and took a "wait and see attitude."

Finally, both Vornado and Palladium/Related have disclosed specific plans and made some significant deals for their new developments -- the Alexander site at Lexing ton and 59th Street and the Coliseum site at West 59th Street. Both have secured major tenants and are proceeding with plans to build what will be fabulous mixed-use projects. The Coliseum developer hopes to prove that vertical retail does in fact 'work in New York. Manhattan Mall has really been the only vertical mall that has been successful and prompted by the departure of Stem's, ownership is currently remerchandising and tenanting the mall. The World Trade Center will now be controlled by Silverstein and Westfield, with plans to add a substantial amount of retail space on the plaza level. Port Authority did a great job upscaling the tenant mix in the concourse with new tenants like Tourneau, Thomas Pink, Ann Taylor Loft and Cole Haan.

Vornado has made a huge commitment in the Penn Plaza vicinity and ultimately plans to develop the six block area where they control multiple properties into an area they liken to Rockefeller Center. Their redevelopment of the Bradlee's site on 14th Street at Union Square should strengthen the retail corridor on 14th Street.

New restaurants are opening every day in the city with new areas evolving to fill the need. The Meat Packing District seems to have been replaced by the east 20's and 30's as an economical destination for hot new restaurants.

True, there were multiple bankruptcies such as Labels For Less, Store of Knowledge and Lechter's, but their stores were quickly absorbed. There were some scares this year and everyone in the industry stopped to catch their breath. Thank goodness the doom and gloom never evolved. We just got some sense knocked into us again as many retailers stopped running blindly into deals.