Technology firms fueling brisk activity throughout Manhattan.

The emergence of many high-technology companies has changed the landscape of the Manhattan real estate market over the course of the past several months.

The office market has filtered into what was traditionally considered manufacturing districts and residential neighborhoods in Midtown West and Midtown South.

Renovated industrial space in these areas has attracted numerous information-sensitive and specialized businesses in the advertising, publishing, multimedia, entertainment, telecommunications and software development industries.

Year-to-date leasing volume indicates how important these high-tech companies have become to the City's economy. The telecommunications industry accounted for over 30 percent of all deals consummated in Midtown South thus far this year.

The New York City Housing Authority's renewal at 250 Broadway and the City of New York's deal at 60 Broad Street have contributed to 745,791 square feet of absorption by city or state government agencies, or 43.8 percent of all Downtown deals year-to-date. However, the entertainment and media industries, led by Internet companies, have emerged as key components to the City's economic engine and the Downtown Information Technology District, which extends south of Chambers Street to the tip of Manhattan.

This area is fast becoming home to hundreds of information technology companies. These firms are quickly emerging as pioneers in revitalizing Downtown. Computer and Internet-related companies have accounted for 14 percent of all Downtown deals, compared to 16.3 percent for the once dominant financial services industry. This is a significant change from last year, when financial services firms were responsible for more than 25 percent of all Downtown lease transactions and computer-related companies accounted for only 3 percent.

What can we expect heading into the new millennium? In the new era of e-commerce, Manhattan will evolve into a hub for financial information and electronic communication. The continued efforts of many landlords to reinvent tired buildings will bring space to market throughout 1999, and thus present opportunities to emerging high-tech and media firms. We will also witness a diversification of the tenant base in Midtown South and Downtown, similar to the evolution that Midtown went through earlier this decade.

The emergence of new industries will continue to expand the playing field to include buildings on the far West Side and in the Hudson square/Tribeca and SoHo/Noho submarkets. These alternative markets continue to attract tenants priced out of other locations, and are becoming a cost-effective location for start-up businesses.

Although large deals such as Credit Agricole's 127,000 square-foot lease at 450 West 33rd Street will continue to capture headlines, small deals are fueling market growth. More than 70 percent of all deals completed this year were 10,000 square feet or less. A key ingredient to the extension of this trend will be the success of many small businesses and emerging industries.

Ray O'Keefe, President, Grubb & Ellis New York