"We saw the reinforcement of Manhattan being a tale of twocities," says Kevin Danehy, EVP and senior managing director at CBRichard Ellis. "Midtown is recovering and has gone from negative topositive, while Downtown is still flat." However, he anticipatesthere will be a number of large leases in Lower Manhattan in 2005."Everywhere else there is a lack of large blocks."

The year saw the rebound of the financial services market inManhattan, Danehy points out. "Citigroup and Lehman Bros. aretaking up incremental space." A number of media companies also madethe city a "media hub" once again, he adds.

"With vacancy rates edging down in many markets and underlyingeconomics heating up both nationally and locally, there has been anunending supply of capital looking to be placed into commercialreal estate," says Peter Korpacz, director, PricewaterhouseCoopers'Global Strategic Real Estate Research Practice.The office market inMinneapolis is finishing the year with positive absorption. Go to,TwinCities Office Market Gains Momentum for additional information.And in Los Angeles, office leasing has picked up, but is not asstrong as the sales market. For more, go to LeasingLags But Sales Soar.