Sector shines as national economy rebounds.

Marcus & Millichap Real Estate Investment Brokerage Company recently released its Retail Research Report for Manhattan, which indicates Manhattan's retail market will continue to perform well as the economy rebounds.

"The effects of the recent economic downturn are quickly fading, and Manhattan retail properties are positioned to turn in a solid performance in the quarters ahead," comments Mitchell R. LaBar, a managing director of Marcus & Millichap and regional manager of the firm's Manhattan office.

"Vacancy is set to recede as the residential market firms, and rent growth appears to be on a solid growth track as space availability tightens."

The report indicates the following for the New York City retail market:

* Nonfarm payrolls are expected to expand 1.7 percent, a gain of 69,000 positions. The large professional and business services sector is forecast to add 16,000 jobs, a 2.6 percent jump.

* Retail completions in the New York metro will fall to 800,000 square feet in 2005 from 1.2 million square feet the year before.

Of this year's total, approximately 30 percent will be built in Manhattan.

* By the end of 2005, vacancy is fore cast to fall to 5.9 percent, and marketwide asking rents are on track to rise 3.3 percent to $101.34 per square foot. Retailers are finding favorable lease rates in Midtown South and Uptown, and vacancy in those areas is falling as a result.

* Investors seeking cash-flowing multi-tenant properties and buyers looking to purchase assets for conversion to residential use remain active.

Residential conversion buyers, who accounted for 20 percent of multi-tenant sales volume last year, could step up the pace of acquisitions before rising interest rates slow the for-sale housing market.