Cushman & Wakefield earlier this week released secondquarter statistics for the Manhattan office market showing Midtownvacancy rate dropping to 6.9% at midyear, down from 7.8% at the endof the first quarter. This decline brings the overall Midtownvacancy rate below the 7% to 9% range, which is typically describedas equilibrium, for the first time in five years.

"A shortage of high-quality available space in Midtown and alack of new product on the horizon have given landlords the upperhand," says Joe Harbert, Cushman & Wakefield's chief operatingofficer for the firm's New York Metro Region.

Year-to-date, vacancy rates are down across all three majorManhattan submarkets of Midtown, Midtown South and Downtown. Themost significant decline over the last year occurred in MidtownSouth, which experienced its lowest vacancy rate since the firstquarter of 2001. Availability dropped to 6% at midyear 2006, down3% from midyear 2005.