Retail is as hot as a just-fired pistol in Manhattan and the other boroughs, and the credit climate and the weakened economy are not affecting the new retail developments planned throughout the city and the region. Industry experts say the weak dollar and the floods of European tourists are driving record-high rents.

Last month, Cushman & Wakefield reported that retail rents on Fifth Avenue reached more than $1,500 a square foot. “The environment in New York City, partially sparked by tourism, additionally by the continued influx of foreign retailers, adds to the great value being placed on space in all of New York City’s trading areas,” the executive director of retail service at Cushman & Wakefield, Joanne Podell, said. “It is a very exciting time for New York, and I don’t anticipate a slowdown on any level.”

The executive vice president of the tri-state retail services group at CB Richard Ellis, Richard Hodos, said the retail scene in the New York region “remains strong. Manhattan is hotter than ever due to the strength of the consumers living here and the tourists, particularly international visitors. Part of the reason for the resiliency is the weak dollar and the relative strength of the euro and other currencies. Retailers who are suffering elsewhere are bustling in New York, particularly the luxury brands.”

High rents are taking their toll on some stores. “Rents have risen dramatically in the last few years, however, making it difficult for bread-and-butter retailers to justify the rents,” Mr. Hodos said. “Even the luxury brands have a limit to the sales per square foot achievable, due to the physical limitations of their spaces. Retailers like Apple and Abercrombie & Fitch are pushing the limits on sales, given the physical limitations of store size.”

The president of Sutphin Properties, Robin Eshaghpour, said there is “no question that retail in the city is hot. National retailers of all segments of the market that want to be in our region are showing special interest in our rapidly changing boroughs.”

High-end retailers are actively pursuing opportunities in the financial district and Lower Manhattan like never before. Earlier this week, the Port Authority of New York & New Jersey agreed to allow the Westfield Group to purchase a 50% stake in more than 490,000 square feet of retail at the trade center site.

“The retail landscape in downtown FiDi has changed dramatically in the last 12 months and will continue to rapidly change as new residential projects prepare to open, and retail stores, which had signed leases over the last several months, prepare to open to service the surging office, residential, and tourist population,” Todd Korren, a senior vice president at Swig Equities, one of the largest owners of commercial office space in the financial district, said. “Renowned names such as BMW, Tiffany, Hermès, Borders, Haru, Bobby Vans, Gristedes, and Thomas Pink as well as numerous banks have recently opened and there is a Starbucks wherever you look. Retailers such as Canali, Tumi, Whole Foods, and Fresco are expected to open in the next several months. High-end retailers including Polo Ralph Lauren, Gucci, and Barneys are actively seeking locations as well. Retail rents in FiDi have increased by 50% to 100%, with rental per square foot now ranging from $75 to over $300 per square foot. We expect to set a new record for retail rent for our 13,000-square-foot retail unit at 45 Broad St., down the street from Hermès.”

The CEO of Winick Realty Group, Jeff Winick, is bullish on the financial district. “We are closing to signing a lease for a 30,000-square-foot supermarket at 14 Wall St. as well,” he said. “An upscale department store will be occupying the ground, second, and third floor for its 50,000-square-foot location at 30 Broad St.”

Major retail developments are in various stages of construction and planning in Herald Square. Late next year, JCPenney will open a 150,000-square-foot store on three levels in the Manhattan Mall. Owned by Vornado Realty Trust, Manhattan Mall is located at 100 W. 33rd St., on the site that once served as the home of Gimbel’s Department Store.

Construction is planned to begin next year for 885 Sixth Ave., located across the street from the Manhattan Mall. The mixed-use tower, a development of Atlantic Realty, will have a total of 51,000 square feet of retail on the ground, second, and third floors. According to Jeff Winick, who is representing the owner, expect an apparel and electronics store to be the major tenants.

Winick Realty is also the leasing agent for Tessler Developments’ mixed-use retail, office, and residential tower rising at 855 Sixth Ave. About 250,000 square feet of retail space will be located on eight floors: Five floors will be above grade and three below grade. A letter of intent has been issued to a high-end grocer for 60,000 to 80,000 square feet of below-grade space.

Retailers are expected to pay as much as $750 to $1,000 a square foot for 27,000 square feet of ground-floor retail space at 52 E. 41st St., the home of Virgin Records. Virgin will be vacating the space in the mixed-use residential tower, which also houses a UA Regal Cinema, on February 1, 2009. Whole Foods Market will be the anchor tenant in the new retail and residential development under construction at 808 Columbus Ave. between 97th and 100th streets on the Upper West Side, occupying 65,000 square feet of the 350,000-square-foot retail complex. Other tenants within the complex include Modell’s Sporting Goods, Bank of America, JPMorgan Chase, Duane Reade, and six other retail chains.

Major retail expansion is under way in Brooklyn, especially in downtown Brooklyn, Williamsburg, and Sheepshead Bay. Muss Development announced this week that Morton’s Restaurant Group would open a steakhouse in the New York Marriott at the Brooklyn Bridge, at 333 Adams St. The restaurant will lease 14,500 square feet in the newly constructed 24-story tower that houses an additional 280 guest rooms, an outdoor public pedestrian plaza, and prime retail space. Last month, developer Josh Muss said he expects to lease the remaining 35,000 square feet of new retail space to a prominent retailer early next year.

Probably one of the most active retail destinations in downtown Brooklyn is the Fulton Street Mall, New York’s third busiest shopping district. A total of 191 tenants are located in 92 properties on the mall. More than 100,000 shoppers visit the mall daily, and many of the retailers report sales of more than $1,000 a square foot.

Next year, JCPenney will be opening its first location in Brooklyn, on Fulton Street. It will occupy the retail space presently leased to Conway’s, which is directly across the street from Macy’s.

Stanley Chera, a principal at Crown Acquisitions, one of the largest owners of property in the Fulton Street area, said leasing “continues to be excellent, with no slowdown in prime locations. Retailers are committed to downtown Brooklyn, and expect to see a new tenant mix over the next few years”.

“With thousands of new residents moving to downtown Brooklyn, expect to see a large supermarket and health and beauty centers opening in this underserved area,” a retail broker, Lori Shabtai of Winick Realty Group, said.

Eco-boomers, yuppies, and families are moving to the residential developments in Williamsburg, and retailers are scouting locations in this hot neighborhood. According to Jeff Winick, the no. 1 location in Williamsburg is the intersection of Bedford Avenue and North 3rd. His company has leased the 38,000-square-foot site to a gym, a bank, and a drugstore, with average rent of $100 a square foot on the ground floor, and $60 on the lower level. He expects to see upscale retailers open in the neighborhood, and for Starbucks to move onto Bedford Avenue and other locations.

Construction is under way at the Gateway Center at the Bronx Terminal Market a key component of the revitalization of the South Bronx. Situated on 18 acres of land near Yankee Stadium, Gateway Center will offer residents of the Bronx more than 1.1 million square feet of retail space, with street-level restaurants and on-site parking for 2,800 cars. Tenants will include Home Depot, Bed Bath & Beyond, BJ’s Wholesale Club, Target, Best Buy, Staples, Marshalls, and Applebee’s. One of the most active developers of urban retail sites in New York City is Acadia Realty Trust. In the Bronx, Acadia is renovating the 117,000-square-foot Sears Building at 400 Fordham Road, near Fordham University. As part of the project, Sears will be relocated to the lower level of the tower and Walgreens will move in. The complex also has signed leases with Best Buy and a health club.

In the Inwood section of Manhattan, Acadia is redeveloping the 140,000-square-foot building formerly occupied by the City of New York and a commercial parking garage. The property is situated at the intersection of Broadway and Sherman avenues, near the Cloisters and Fort Tryon Park. The company plans to redevelop the site to include retail, commercial, and residential components totaling more than 300,000 square feet.

In November, Acadia paid about $20 million for a 2-plus-acre site that spans Sheepshead Bay Road to Voorhees Avenue in Brooklyn. According to Massey Knakal Realty Services, which represented the seller, the sale is the second-largest sale in the history of Sheepshead Bay. According to trade reports, Acadia plans to demolish the site and build a mixed-use development of close to 100,000 square feet, with national retail tenants and extensive parking.

“Many investors are looking to acquire retail properties in all of the boroughs today as they realize just how under-retailed New York City is,” the chairman of Massey Knakal Realty Services, Robert Knakal, said. “In most cities in the U.S., there are 22 square feet of retail space per resident, while in the city it’s only 6 square feet. The number of investors on our investor list who are looking for retail condominiums has tripled during the past two years.”

I concur with the president of Vornado Realty Trust, Michael Fascitelli, when he says: “Ownership of retail site in New York City is one of the best investments available in the United States.”

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.