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NEW YORK CITY-The Real Estate Board of New York's Retail Report findings, which include rising rental rates in almost every portion of Manhattan, come as no surprise to those entrenched in the field. "We're the hottest city in the world for retail," says Henry Goldfarb, executive managing director, head of retail for Grubb & Ellis.

In the past 12 months, the average asking rent rose by 4% to $106 per sf. Bigger gains were seen in the borough's most renown retail streets with asking rents increasing 14% on the Westside to $122 per sf, 8.2% in Downtown to $92 per sf and 7% in Midtown to $137 per sf. Ground-floor asking rents posted even higher increasing in asking rents. Madison Avenue's rent rose 26% to $1,000 per sf, while West 42 Street saw a 50% increase in the last year to $300 per sf.

Contrary to some opinions that the retail sector will slow in the months to come, Goldfarb says while it may stabilize, the industry is not tanking. And in Manhattan rental rates and industry interest just keeps rising. Madison and Fifth avenues have been the most sought-after section for years, but some companies are looking elsewhere. "The retailers are looking for the next up-and-coming area where the rents are lower," Goldfarb says.