Location	Change From A Year Ago
Manhattan Retail Space	Down 19%, as 2.7 Million square feet were rented
Downtown Available Space	Down 35%

Asking Rents For Retail Space	Change% and Rent/SF From A Year Ago
Manhattan Rents	Up 55%
Average Manhattan Retail	Up 10% to $97/SF
Prime Retail	Up 32% to $284/SF
Madison Avenue (60's to 70's)	Up 17% to $850/SF
Fifth Avenue (49th to 59th)	Up 11% to $717/SF
East Side	Up 21% to $155/SF
Midtown	Up 12%
Midtown South, SoHo and the West Side	Up 7%
Small Retail Under 1,000SF	Up 12%

NEWSWORTHY EVENTS

WTC jury decision alters potential downtown office and retail landscape.

A jury recently decided that 13 insurers who held about $2.1 billion in coverage on the trade center would only have to pay for one occurrence. This means the potential award for Larry Silverstein WTC disaster will be reduced from $7.5 billion to $4.68 billion. The award could be further reduced if Swiss Re policy covers only one occurrence. This means that Larry Silverstein may not have enough money to complete all the buildings. This may not be a bad thing for the downtown market as a rush of inventory is added to an already saturated market. Larry Silverstein could offer the lowest cost buildings as he will have virtually no debt on the properties and the most modern infrastructure. This will cause intense pressure on the older building to either convert to residential or dramatically lower price to compete. Neither are attractive options to existing landlords. Also downtown demand is likely to decrease as financial services firms diversify geographically out of Manhattan.

Recent Retail Deal

Theory, a womens-wear retailer, rented a 61,500 square foot five-story building for offices, showrooms and a retail store at 36-40 Gansevoort Street in the Meat Packing District. The building is opposite Pastis and the new Hotel Gansevoort. The 15-year lease had a blended asking rent of under $3 million a year for the entire building.

New York to become a major CRUISE Ship Destination

The city signed agreements with Norwegian Cruise Lines (NCL) and Carnival Corporation for them to pay the City at least $200 million in port charges through the year 2017. The City is committing an additional $150 million to modernize and renovate the New York Cruise Terminal on Manhattan's West Side, and to create a new berth on the Brooklyn waterfront to meet the growing demands of the cruise industry.

New Hotel Development

The Bryant Park Tower, a Marriott Residence Inn, started construction of the $150 million, 43-story building at Sixth Avenue and West 39th Street. The project is to include 96 rental apartments and 8,500 sf of retail and open in December 2005.

Land Sale

The Clearview Cinema site at 2770 Broadway, SE corner of 107th Street, was sold for $16.6 Million or $166 per buildable square foot. The purchaser, the Clarett Group, is constructing a 22-story luxury condominium with retail on the ground floor.

New York Office Leases:

Total Class A vacancies increased from 21.99 million RSF to 23.12 million RSF, while Total Market vacancies increased from 39.62 million RSF to 40.45 million RSF. Total Direct Lease availability increased from 31.25 million RSF to 31.59 million RSF, while Total Sublease vacancies finally stopped their two year declined rising to a high of 8.86 million RSF from 8.38 million RSF. Midtown availability increased from 21.87 million RSF to 22.57 million RSF, while Midtown South availability decreased from 7.50 million to 7.46 million RSF. Total Downtown Vacancy rates however increased from 10.26 million RSF to 10.43 million RSF. Total Vacant space in Midtown increased as Total Direct Lease space availability increased from 16.68 million RSF to 17.18 million RSF adding to the rise in Total Sublease availability from 5.19 million RSF to 5.39 million RSF. Midtown South Direct Lease availability fell slightly to 6.23 million RSF from 6.24 million RSF, and Sublease vacancies decreased slightly as well from 1.26 million RSF to 1.23 million RSF. Total Downtown vacancies increased even though Direct Lease space fell from 8.33 million RSF to 8.19 million RSF, while Sublease availability increased from 1.93 million RSF to 2.24 million RSF.

Manhattan Retail Leases:

Total Retail availability increased from 0.53 million RSF to 0.54 million RSF. Midtown availability decreased from 0.24 million RSF to 0.23 million RSF. Downtown remains the same at 0.03 million RSF. Total Midtown South Vacancy rates increased from 0.26 million RSF to 0.27 million RSF.

Manhattan Industrial Leases:

Total Industrial Vacant space decreased from 0.86 million RSF to 0.82 million RSF due to a decrease in Total vacancies in Midtown from 0.48 million RSF to 0.45 million RSF. Total vacancies in Midtown South decreased from 0.38 million RSF to 0.36 million RSF.Vacancies rates in Downtown remained unchanged.

Legend

RSF-Rentable Square Feet SF- Square Feet