Even though the list of negative economic news is long and varied — consumer confidence in April fell to its lowest point in five years and consumer spending is falling as inflation is on the rise; food prices have risen between 10% and 15% in the last six months and prices are rising for nearly every commodity; clothing imported from Europe is selling at its highest prices ever — the retail real estate sector is strong in the tri-state region, and many projects are in various stages of development across the five boroughs.

“Retail real estate fundamentals in the New York metropolitan area remain strong for several reasons,” the executive director of retail services at Cushman & Wakefield, Gene Spiegelman, said. He said the region is a “supply-constrained marketplace.”

“By national standards, the region is under-stored and as you enter the five borough marketplace, the ratio of retail gross leasing area — the floor area that can be used by retailers — per capita decreases to approximately less than one-third of the national standard,” Mr. Spiegelman said.

In addition, he noted that the metropolitan area boasts more than 17 million residents with “huge pockets of affluence,” and employment levels are remaining stable. Manhattan, Mr. Spiegelman said, is a gateway market for new international retail brands, and is benefiting from strong tourist demand, with international travelers spending euros and pounds.

“There are a few important factors driving the continued success of retail in New York City,” the president and CEO of Acadia Realty Trust, Kenneth Bernstein, said. “First, New York City has less retail than the United States in general. The five boroughs have only one-third of the retail square footage per person that exists in most other parts of the county. This lack of supply keeps tenant demand and tenant productivity stronger than in markets with abundant retail, even in a softening economy. Second, the barriers to entry — for example, the ability for the development of new stores — are significantly higher in New York City, also keeping tenant demand strong.”

Last week, the city’s Economic Development Corp. announced the selection of Related Cos. to redevelop the 575,000-square-foot Kingsbridge Armory in the Kingsbridge Heights section of the Bronx. It is thought to be the largest armory in the world, containing 575,000 square feet of space, including a former drill floor measuring 180,000 square feet, larger than a full city block. The city is investing about $30 million in capital funds for environmental cleanup in the building, replacement of its roof, and repairs to the façade.

Related’s proposal for the landmarked structure, the Shops at the Armory, calls for a destination anchor retail development, coupled with specialty and local retail, restaurants, a cinema, and community space. Other proposed features include a recreational facility, catering and banquet space, outdoor open space with a seasonal farmers’ market and café, and parking for 400 cars. The project is expected generate about 1,800 construction jobs and 2,000 permanent jobs. Related plans to invest about $310 million to acquire and redevelop the Armory.

Related is also the developer of the Gateway Center at the Bronx Terminal Market, which will redevelop a portion of the Bronx Terminal Market site along with the former Bronx House of Detention site. The project will include retail and restaurant space as well public access to the Harlem River. When completed in 2009, the 1 million-square-foot retail development is expected to contain a Target, Home Depot, BJ’s Wholesale, Bed Bath & Beyond, and Best Buy. One of the buildings on the site is a multi-level 2,600-space parking garage. The $500 million project is estimated to create 2,100 permanent retail jobs for the residents of the Bronx. The city of New York will also be constructing a waterfront park in connection with the project. Additionally, a 250-room hotel is planned as a second phase.

Major retail developments are planned and under construction in Harlem. Next year, East River Plaza, a development of Blumenfeld Development and Forest City Ratner, will open in East Harlem. The 475,000-square-foot retail center will be situated just off the FDR Drive between 116th and 119th streets. Major tenants will include Manhattan’s first Target and Best Buy.

In the summer, construction is scheduled to commence on Harlem Park, the 21-story, 640,000-square-foot office and retail tower on the former parking lot of the New York College of Podiatric Medicine, between 124th and 125th streets and Park Avenue. Harlem Park is a development of Vornado Realty Trust, MacFarlane Partners, and Integrated Holdings. Earlier this year, Major League Baseball signed a lease in the building to house its new television network. According to real estate sources, Macy’s is in negotiations with the developer to occupy the first three floors and the basement level of the tower.

In Queens, construction is progressing at a new mixed-use retail and residential project being built by Vornado Realty Trust. The development is situated behind the Rego Park Mall, bounded by the Horace Harding Expressway, Junction Boulevard, and 62nd and 97th streets. The three-story retail complex, which is scheduled to open later in the year is said to include a Home Depot, a Kohl’s, and Century 21. The original development included a residential component with about 400 units built in two residential towers. In March, the developer had to put that on the hold due to the weakened real estate market.

One of the largest retail developments in Manhattan is Columbus Village, 320,000 square feet of retail space in three contiguous city blocks between 97th and 100th streets on the Upper West Side. A 57,000-square-foot Whole Foods will anchor the tower at 808 Columbus Ave.

At the southwest corner of Broadway and 72nd Street, construction is progressing at a mixed-use retail and residential rental tower. The building will contain 48,000 square feet of retail space on five floors. According to real estate sources, the developer is seeking a rent of more than $500 a square foot for the first floor.

On March 4, Target opened a 200,000-square-foot store on the second and third floors of the Junction, a project at the confluence of Flatbush and Nostrand avenues near Brooklyn College. The first floor of the complex, a development of Triangle Equities and Target, will be the home of retailers including Circuit City, David’s Bridal, the Children’s Place, and Payless Shoe Source. A 500-car parking garage operated by Central Parking is adjacent to the site.

Industry leaders are cautiously optimistic about the state of retail in light of the current economy.

“Trophy retail locations are continuing fetch high rents as seen at 666 Fifth Avenue,” the executive vice president of CB Richard Ellis, Andrew Goldberg, said. “Abercrombie & Fitch has entered into a lease for its’ A & F Kids Division at a remarkable price of $2,000 per square foot for the ground floor in half of the existing Brooks Brother’s location. This is a testament to a flagship location with excellent visibility on Fifth Avenue.”

Mr. Goldberg added: “Secondary and territory locations are taking longer to rent, with significantly less demand by local and national retailers, thereby forcing lower rents and higher rental incentives for free rent and tenant improvements.

“There continues to be a demand for big box space as demonstrated by the leasing of the retail component at 808 Columbus Avenue and at the Related Gateway development in the Bronx,” he said.

Looking ahead, Mr. Spiegelman of Cushman & Wakefield said the buoyancy of New York’s retail sector will depend on how many primary and ancillary jobs Wall Street sheds, the continuation of tourism traffic, the net effect of the weak dollar on retail sales, and whether rising energy costs and food prices will further slow down consumer spending.

“We still must look cautiously at the quarters to come as storm clouds have rolled in, and the question is how much will it rain on our parade?” he said.

With thousands of individuals moving to New York City and visitors from around the world flocking to our great city, expect retail activity to remain buoyant for the foreseeable future.

Mr. Stoler, a contributing editor to The New York Sun, is a television and radio broadcaster and a senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.