"Our research is telling us the same as many resources here in the US: the economy is already showing signs of getting back to normal," says Grubb & Ellis CEO Barry Barovick. "Many companies are not forward planning for their real estate needs, and those companies are going to pay a steep price both here and abroad as space begins to tighten and investment property prices rise."

Barovick predicts New York is predicted to enjoy a healthy comeback by 2003, despite occupancy costs falling 8.3% last year. "Its stature as an economic epicenter of world financial markets, and its proven resiliency as a stable world business community, is obvious to both Americans and the World," says notes. "Many have speculated on the outflow that followed the World Trade Center attack. The truth is space is tight, and it's going to get tighter." The Manhattan market and surrounding office markets have still held onto much of the rental gains of the last two years, the group claims.

In the Grubb & Ellis global office occupancy cost report, New York is the only US city in the top 10, while the sharpest drops in occupancy costs came from tech markets San Francisco (-51.3%); San Jose (-45.8%) and Boston (-23.3%). The slump, which the report says stems from reaction to US and Japanese economic downturns and the financial meltdown in the global tech sector, makes these areas prime investment targets.