In the report, M&M says foreign investors looking to escape the European debt crisis will deploy capital in flagship areas of Manhattan, while a few will target retail condos with short-term leases and replaceable rents. Driving this trend, Parker says, is the city’s booming retail corridors and the hotel sector.

“People who have put off a trip to New York for a couple years maybe now are taking that trip,” he says. “There’s an ebb-and-flow and you have to look at where they are coming from and how long they are staying and spending money, but certainly, if you look at the strength of their currencies – certainly the Euro, the Aussie dollar – if they come to New York and fill up a suitcase worth of goods, it’s still very cheap here for them, respectfully.”

At year’s end, the city reached a record 90,000 hotel rooms, a 24% increase since 2006, according to the Bloomberg administration. By early 2012, more than 7,000 rooms are in the pipeline that will add to the city’s hotel inventory, a sign that retail, too, will continue its upward momentum.

With tourist attractions such as the 9/11 Memorial, the South Street Seaport and the Statue of Liberty, one area to watch is Downtown Manhattan. Darrell Rubens, an executive vice president at Winick Realty Group LLC, says the brokerage firm has recently completed several major lease deals here, including TJ Maxx to 14 Wall Street, Chipotle to 281 Broadway and Goodburger to 101 Maiden Lane.

“It’s the strongest it’s ever been, and I think it’s just getting stronger,” Rubens says, noting that tourism in Lower Manhattan has gone from five million people to nine million in a matter of years.

“I was working on it before 9/11 and was involved with a lot of the retail conversions because there was never much retail down there before,” he says, noting that the area’s new 60,000-plus residential population has also helped spur demand for more stores. “With new apartments and hotels, in the last few years, we’ve seen tourism hit all-time records.”

Outside of Manhattan, strong retail activity has crossed the East River to the Brooklyn side. After the opening of the Barclays Center in September, M&M says the development will continue to spark retailer interest in the borough.

“There used to be a negative perception about Brooklyn for retailers and even property owners in the marketplace, but really over the last five to 10 years, we’ve seen a huge push into the marketplace by new investors and new retailers,” Parker says. “They see the demographics and then there’s other retailers that have entered the market and have had a great amount of success.”

Jason Muss, a principal at Muss Development, a 106-year-old New York family-owned real estate company, previously told GlobeSt.com that Downtown Brooklyn will serve as the connecting link to surrounding neighborhoods like DUMBO and Fort Greene. Fresh off developing the New York Marriott at the Brooklyn Bridge hotel and signing new leases for Panera Bread, Sugar & Plumm, American BBQ and Beer Co. at 345 Adams St., the firm is beginning to observe a new retail and ‘restaurant row’ emerging downtown.

“We have other tenants pretty close to signing,” he says. “We are very excited about North Brooklyn in general. So many things are happening in Downtown Brooklyn that it is going to continue to strengthen our office building there, which is over 900,000 square feet of fully occupied Renaissance Plaza, the hotel which continues do well and has incredible potential for the future.”