Financial services, on the other hand, while still the city's leader, is still sluggish and doesn't appear poised for a turnaround. The sector's leasing activity slipped to 19.5% this year, compared with 30.1% for the first-half of 2012. “I don't see finance coming back in the short-term,” Harbert declared. Average rents rose in the second quarter, but just by 1.7% from $55.69 in the first quarter. “Pricing is still reasonable, except on Park Ave.,” he said, where “you can't find anything less than $85 per square foot.”

Most of the leasing activity was done in Midtown, Harbert noted. The area Colliers calls the Plaza District was the biggest star of Midtown, with more than 2 million square feet of space leased in the second quarter, and an approximately 1.7 million square foot jump from the first quarter. The Grand Central area was second with more than 1.5 million square feet leased in the last three months, up from about 555,555 square feet in the first quarter. This year has also seen the “return of high priced deals—of more than $100 per-square-foot—returning to the market.” A total of 35 such deals were done in 2012 but about the same number of transactions were completed in the first half of this year.

As for Midtown South, says Harbert, “tenants are becoming very flexible about the Penn Station/Garment District because it's the only space they can afford. Leasing in that portion of the submarket came in at 1.2 million square feet, well ahead of other areas in the tightly squeezed portion of the city.

Prices continued to skyrocket there, with “$60 per square foot not uncommon,” says Harbert. “$60 is the new $50,” adds Andrew Roos, vice Chairman, tri-state. “Some landlords are even pushing to $70 but I think you'll see some resistance.”

Meanwhile, Downtown continues to offer a value play, with rents remaining flat, providing an option for tenants priced out of Midtown and Midtown South. The submarket also has a high availability rate of 15.9%, according to Harbert. Class A space is priced in the mid-$40s and up, but with concessions, the net effective rent is still down from other markets, adds Roos. “Downtown is always the last to rise, first to fall,” he said.

On the capital markets front, said Peter Kozel, Colliers' chief economist, tri-state, "trophy properties have been the targets for sale.” The market is solid, with $8.5 million having traded thus far in 2013 compared to $9.5 million in all of 2012. “Even though rents are flat, people want buildings.”