Retail rents to continue march north.

The retail property sector in New York City will remain vigorous in 2008, as existing properties continue to record respectable vacancy and rent growth, and new retail trade areas rapidly emerge, according to the 2008 National Retail Report by Marcus & Millichap.

One of the best examples

Also included in the report is the firm's annual National Retail Index (NRI), a snapshot analysis that ranks 43 retail markets based on a series of 12-month forward-looking supply and demand indicators. New York City moves down three places this year to No. 4.

"Retail properties in areas with significant pedestrian traffic will continue to be in high demand, as rents are projected to continue rising during the near term in the five boroughs," says Edward Jordan, regional manager of Marcus & Millichap's Manhattan office.

Following are some of the most significant aspects of the New York City Retail Research Report:

* Citywide, employers are forecast to create 22,000 jobs in 2008, a 0.5 percent gain.

* Nearly 1.1 million square feet of space is slated for delivery in Manhattan and Brooklyn.

* Vacancy is forecast to end the year at 5.4 percent.

* The average estimated rent in the entire city is expected to climb 4.9 percent to $71.53 per square foot.

* Existing storefronts with residential components will remain in demand among investors, as these assets often provide stable returns and steady value appreciation.

In the 2008 NRI, San Francisco moved up seven places to take over the top spot, surpassing last year's leader, New York City.

San Diego moved up three places to the No. 2 spot. Seattle inched up two places to No. 3. San Jose climbed five places to No. 5.