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THE NEW YORK REAL ESTATE WORLD IN THE PAST FEW years has seen a market that's hot, hot, hot.
Deals have been done at prices and speeds that have shocked even the most jaded veterans. Landlords have let prime tenants go without blinking an eye, knowing that someone willing to pay higher rents will be along shortly. Spacehungry tenants have moved into neighborhoods once considered beyond the pale.
In short, the boom has been about more than prices. It has also been about a state of mind that says: Move now, move fast, buy it, sell it, keep pushing higher and farther. If I can get $go, why not $100? If my neighbor is getting $100, why can't I?
This kind of pace can't be sustained indefinitely in every market.
Areas off the beaten track may be the first to see some softening of prices. As dot-coms continue to consolidate or fold, converted industrial space is coming back on the market. Only time win tell if the top prices reached in 2000 Will hold.
In the retail sector, it's hard to imagine that prices like $600 a square foot on Madison Avenue and $300 a square foot in SoHo - in some cases double the levels of the year before can go much higher or even be sustained, considering the disappointing holiday sales this past season.
However, the consensus for Class A office properties in traditional neighborhoods is that there may yet be some room to grow before last year's record-high prices level off. That's partly because of the tight vacancy rate, and partly because of macro factors.
"New York remains an undervalued market when you put it in an international context," says Stephen B. Siegel, chairman...