"Despite a challenging climate in property financing, taxpayerassets will remain highly coveted by investors seeking to trade outof more management-intensive properties, such as apartments," saysJ.D. Parker, regional manager Marcus & Millichap's Brooklynoffice, in a prepared release.

The report notes that 750,000 sf of retail space is expected tobe delivered during 2008, compared with 192,000 sf last year. Theretail vacancy rate is expected to end the year at 4.7% due to atemporary softening of demand, while asking rents climb an averageof 9%. For national tenants leasing space for the first time inBrooklyn locations, new rents are expected to rise at a muchgreater rate. According to the report, the median price in themulti-tenant sector has risen 11% to $267 per sf during the mostrecent 12-month span; that compares with a 4% gain in the previousyear.

To Brian Leary, managing director of Massey Knakal's Brooklynoffice, the upturn in retailing is not surprising and has been along time coming. "Brooklyn is tremendously underserved from aretail perspective," he tells Real Estate New York. "Thenational average figure for retail space per individual issomewhere in the range of 300 to 500 sf. In the outer boroughs,it's more in the range of 100 to 175 sf of retail for everyindividual."