Harbert added that there are as many as 60 firms searching thewaters for space in excess of 100,000 sf and looking to make dealsover the next eight to 15 months. "Real estate markets move inconcert with the economy."

While a number of deals have been made in excess of $100 per sfin Midtown, one space traded for as high as $140 per sf. Andhigh-end retail is a hotspot for Manhattan as there have been rentsof $1,200 per sf along upper Fifth Avenue.

When it comes to investment activity, "New York is a tale of twostates," said Christopher J. Lowery, CEO of Cushman's GlobalCapital Markets & Principal Activities Group. "It's draggeddown by softness Upstate." On the international front, he saidthere is investment interest and activity in such emerging marketsas Poland, Russia and Bulgaria. "It is driven by a supply of globalcapital for product." He also noted that cap rate convergence ishappening globally, despite distinct market differences.