All in all, Marcus & Millichap is calling for a 3.8% gain in retail sales for 2004 that the firm expects will translate into more tenant demand. An anticipated 2% increase should push the average rent up to $63.16 per sf. And Uptown, tourism and upscale residences will help elevate the median price to nearly $700 per sf.

Other things to watch out for: redevelopments in Chelsea and Hudson Yards and employment growth in the financial services and health services sectors. "Fueled by strong investor demand, retail property prices are rising at a rapid clip," says Mitchell R. LaBar, senior vice president and regional manager of Marcus & Millichap's Manhattan office, adding that the firm expects the median price for multi-tenant properties to increase by $25 per sf in the second half of the year.

New York City moves up three places to squeeze into the NRI's top ten at number nine. Orange County, Calif., claimed the top spot, edging out Washington, DC, which held the top of the charts for the previous two years. San Diego held firm in third followed by Fort Lauderdale and San Francisco. The annual National Retail Index offers a snapshot analysis ranking 40 retail markets.