Tenants seeking space may want to take a close look at Midtown, according to Harbert. “It's still a relative bargain; rents are not even close to the previous peak.” Rents in the submarket did increase however. Average asking rents jumped 2.3% to $77.93 per square foot, up from $76.15 per square foot in the first quarter and up nearly 5% from $74.29 per square foot a year ago. Leasing fell by slightly more than 12% to 4.31 million from 4.91 in Q1, though it was up .6% from 4.28 million year-over-year. Absorption soared to a positive 2.2 million square feet, up considerably from the negative 425,710 square feet the previous quarter and positive 902,866 square feet a year ago.

Meanwhile, in Midtown South, “leasing was on fire,” declared Harbert. Activity totaled three million square feet, up 14.3% from 2.6 million square feet last quarter and up a staggering 34% from 2.2 million square feet a year ago.

Overall asking rent hit another all-time high, breaking the record set just last quarter and marking the 18th consecutive quarterly increase. Rents hit $64.26 per square foot, up 3.6% from $62.02 per square foot last quarter and up 13.8% from a year ago, when average asking rents were $56.47 per square foot. “Midtown South rents will double from 2008 levels by year-end,” Harbert predicted.

Lower Manhattan had a different story. “I'm a little worried about Downtown,” Harbert asserted. “There's been a shift and people are committing to Hudson Yards versus Lower Manhattan.”

The submarket experienced its second consecutive quarter of under one million square feet of leasing activity, with no lease closed in the second quarter for more than 100,000 square feet of space, according to Harbert. Lower Manhattan did register 480,000 square feet of positive absorption in the second quarter but absorption in the area is still a negative 1.38 million square feet year-to-date.

Despite its issues, Downtown achieved record rents in the second quarter. The average asking rent was $55.07 per square foot, representing just a slight increase from the $55.00 per square foot reached in the previous quarter but it was an all-time high for the submarket.

In capital markets, according to Colliers, core buildings continued to dominate sales activity, with 35 transactions totaling $12.5 billion in transactions year-to-date, pushing pricing to record levels. Class A buildings in Midtown South are going for $1,402 per square foot, nearly the same price as Midtown assets, which are trading for $1,521 per square foot—on average. Class A Downtown properties have averaged $497 per square foot year-to-date.