During a Wednesday media luncheon, Los Angeles-based CB RichardEllis presented its April 2008 Manhattan MarketView Snapshot andpointed out that despite slowing rent growth, all three Manhattanmarkets achieved all-time monthly rent highs in March. Midtownrents remained the strongest of the three markets, with Marchasking rents at $85.61 per sf, up from $84.27 in February and$72.25 a year ago. Leasing inched up month-over-month, but was 3.9million sf for first quarter 2008 compared to nearly three millionsf first quarter 2007.

"We appear to have passed an inflection point, as the leasingmarket weakens, albeit at a gradual pace, due to the slowing USeconomy and turmoil in the financial markets" said John Powers, NewYork Tri-State Region chairman of CBRE, at the luncheon. "Manhattanshould see rents begin to dip, but we do not expect a flood ofsublease space to come on the market, as New York seems lessaffected by the recent job eliminations in the mortgage sector insouthern California and the southwest. At the same time, most ofManhattan's landlords, especially REITs, appear to bewell-positioned with low vacancy and strong balance sheets."

[IMGCAP(2)]Powers also spoke on capital markets, noting that"the credit crisis has made it much harder to obtain debtfinancing, especially on larger transactions where a consortium oflenders is required rather than the once robust CMBS market. Volumeis down tremendously from last year's record high of $12.8 billionin the first quarter to $1.5 billion in first quarter 2008, butcompares favorably with the $1.1 billion of Manhattan office salesin the same period of 2005 and the $2 billion in sales in 2006," hesaid.