But the Midtown submarket overall, remained below average. Despite a 275,000-square-foot lease by Wells Fargo at 150 E. 42^nd St., a 400,000-square-foot lease by Bloomberg at 120 Park Ave., a 330,000-square-foot consolidation by Deloitte and a 1.3 million-square-foot renewal by NBC Universal, year-to-date absorption is now a negative 2.09 million square feet in Midtown, and Q1 leasing fell short of 2011’s numbers by 39%.

The picture in Midtown South, however, is a bit rosier. Geoghegan said average asking rents increased by over 14% in the last 12 months, and in 2011, saw the highest leasing velocity experienced in that market since 2000. He added that heavy demand from creative companies, technology firms and start-up industries, in large part due to the economic advantage to being in Midtown South over Midtown, is continuing.

“It’s also something we call the Google effect,” he said. “Being close to other technology companies that are very successful is a real advantage to these technology firms and start-ups,” he added, noting that the Chelsea and Union Square submarkets have the lowest availability rates throughout all of Manhattan at 6.9% and 5.2%, respectively.

Downtown has also shown the highest leasing velocity since 2006, and positive absorption for the first time since 2007. But rents haven’t seen much traction over the past year, furthering an economic gap that exists between Midtown and Downtown asking rents, Geoghegan said.

“A number of large blocks in that market stand at a historical high,” he said. “That doesn’t take into account a lot of the product that’s going to be coming on line over the course of the next three to four more years, and we haven’t captured the World Financial Center 2 & 4 when the Bank of America lease expires in September 2014.”

Geoghegan said several large blocks of space would also be coming available in Jersey City, a major competitor of Downtown, certainly for back-office type requirements. "So we certainly anticipate some downward pressure on pricing based on that situation,” he added.

And while tenants are taking more time to make decisions, many are continuing their flight-to-quality trend. Trophy buildings are achieving rents 65% higher than normal product, averaging above $65 per square foot.

Robert Alexander, chairman of the New York Tri-State region for CBRE, said “businesses that have greater elasticity toward paying higher rents” are usually “the higher margin businesses” like hedge funds and boutique financial firms that are willing to take space in top-tier locations.

“But it’s a whole mixed bag,” he said. “Leasing activity has been generated by broader range of industries beyond traditional finance and legal."