Normally, the content in StreetWise is very macro in nature as I try to make the topics of interest and germane to a national audience. This week, I will divert from this practice to share with you what we are seeing in the New York City building sales market and, perhaps, those of you operating in other markets across the country can chime in with what you are seeing in your markets. In the first quarter of 2010 (1Q10), we did not see the increase in sales activity that we had anticipated based upon the positive psychology many participants in the market are exhibiting. In terms of dollar volume of sales citywide, there were $2.03 billion of closed transactions, a 0.7% reduction from the $2.05 billion transacted in 1Q09. Interestingly, we saw better results in Manhattan than in the outer boroughs where activity levels continue to drop from the remarkably low 2009 levels. On the island of Manhattan, we segment the market into two distinct regions: "Manhattan" which is the market south of 96^th Street on the Eastside and south of 110^th Street on the Westside and "Northern Manhattan", which is north of those boundaries. In 1Q10, Manhattan sales activity remained relatively unchanged from 1Q09 as we had $1.539 billion in closed transactions versus $1.536 a year earlier. While this total represented an increase of just 0.2% from 1Q09, the 1Q10 activity was up 51% from the $1.01 billion in 4Q09. Northern Manhattan performed much better as sales activity hit $116.9 billion, up 197 percent from the $39.3 billion in 1Q10. It is not surprising to see Northern Manhattan performing as well as it was the submarket most adversely affected during this downturn. Surprisingly, sales activity in the boroughs continued to drop. In the Bronx, sales volume was down 13% from the $79.7 million in 1Q09. In Queens, volume dropped to $143.4 million in 1Q10, a 20.9% drop from a year earlier. Brooklyn was the weakest performer with $161.9 million in sales, a 23% drop from 1Q09. 1Q10 performance versus 1Q09 performance was relative unchanged on the whole; however, 1Q09 was not the low point in activity last year. In fact, activity levels dropped from 1Q09 showing that the low point in activity was in 2Q09 or 3Q09 depending on market segment. Therefore, if we annualize 1Q10 activity, the yearly total for 2010 would exceed 2009 by about 30%, something that bodes well for this year. Manhattan is always the last submarket to fall and the first to rebound so the 1Q10 activity is a clear indication that the market is bottoming out and recovery is on the way. While the dollar volume of sales tells us something about market activity, at Massey Knakal we focus much more on the number of buildings sold as a few large transactions can skew the dollar volume total significantly. In fact, in 1Q10 to top 6 sales represented nearly half (48%) of the total dollar volume of sales. In New York City, we track a statistical sample of approximately 165,000 properties. In 1Q10, there were 373 properties sold. This represents a 2.8% increase over the 363 sales in 1Q09. If we annualize the 373 sales, we are on pace to see 1,492 buildings sold in New York City in 2010. This represents a turnover rate of 0.9 percent of the total stock of properties and is up slightly from the 0.87 percent turnover in 2009. To provide some perspective on this projection, in 2006 and 2007, we saw turnover ratios of 2.96 and 3.04 respectively. With regard to the number of properties sold, once again, Manhattan and Northern Manhattan showed positive gains in 1Q10 while the boroughs continued to drop. 1Q10 sales activity was nothing to write home about, however, there are clearly reasons to be optimistic. We have seen a significant increase in the supply of distressed assets coming to market as banks and special servicers are either close to completing foreclosures or are growing tired of the protracted foreclosure process here and are deciding to sell paper as opposed to waiting to obtain title. The discounts necessary to sell notes is not large enough to dissuade sellers from moving this paper. We are also seeing a substantial increase in supply from discretionary sellers as they see more opportunities coming to market and want to either reposition their portfolios or have some extra dry powder to take advantage of new opportunities as they present themselves. Even more positive is the fact that these new offerings are being met with tremendous demand. The activity on almost all of our exclusive listings (502 as of today) is very strong as we are seeing buyers move off the sidelines and onto the playing field. Based upon the number of contracts we have signed in 1Q10 (an increase of 87% over 1Q09), we expect activity to pick up significantly in the balance of 2010. We are projecting a citywide volume of sales turnover to exceed 1.2% this year, about a 40% increase over last year. In Manhattan, we expect turnover to climb to 1.6% to 1.7%, a 40% to 45% increase over last year. While these projections would still result in historical lows (not counting 2009 levels), this level of activity would be a welcomed increase for those of us who rely on transaction volume for our livelihood. Just as Manhattan is leading New York City out of this cycle, we expect New York and Washington (which has already seen positive shifts in fundamentals) to lead the U.S. out of this downturn. We remain firm in our conviction that the worst of this cycle is over and, while there are still some landmines out there, better times lie ahead of us. Mr. Knakal is the Chairman and Founding Partner of Massey Knakal Realty Services in New York City and has brokered the sale of over 1,050 properties in his career having an aggregate market value in excess of $6.2 billion.