Leasing pace picks up for Manhattan markets.

Pervasive sluggishness in Manhattan's commercial real estate market has at last begun to subside. In fact, surveys tracking leasing activity in the Midtown, Midtown South and Downtown markets indicate a 40 percent rise in space movement over the last five months.

The surge of activity, precipitated in large part by the compelling combination of generous concession packages and steadily declining rental rates, is likely to continue over the short-term. For tenants, opportunities abound for high-quality space throughout the city, and are even more abundant in the Financial District.

Engendering the market upswing are the small space users, whose leases of 50,000 square feet or less comprise more than 80 percent of the transactions consummated over the past five months.

Most large space users, meanwhile, remain reluctant consider a relocation decision until clear signs are shown of the long-awaited economic turnaround.

But those waiting in the wings should hardly get comfortable. Indeed, the upward spiral in leasing activity, combined with a paucity of new product, will prove formidable in chipping away at availabilities next year, causing a firming up of both rental rates and concessions.

Beyond next year, the commercial property forecast looks still better. At this point, healthier market conditions should precipitate a real demand for new construction. Of course, the need for new product will be limited to fully pre-leased buildings.

On the ownership side, too, the future looks promising, as the recent turbulence among large property owners may, ironically, signify the end of the current correction period. More specifically, just as aggressive acquisitions by owners in the 1970's inspired confidence and growth in the market, the shakeout among these same firms indicates the close of one era, and ushers in-a new one.