NEW YORK CITY—An evolving—and long overdue—recovery of jobs in the financial services sector has prompted a surge of activity in Midtown, as well as in Lower Manhattan. The city's other submarkets also fared well in the first half of the year, as did the investment sales market, reaching record setting levels, according to Cushman & Wakefield's mid-year report, presented Tuesday morning in Midtown.

Including private equity firms, “which, frankly, is where the growth is,” said C&W executive vice chairman Josh Kuriloff, the financial services sector is leading new leasing activity in Manhattan this year and has led the Midtown market to one of the strongest first halves of a year on record.

Midtown had a total of 10.5 million square feet of new leasing, which is up 12.5% year-over-year and marks the only market to see an increase from last year. The vacancy rate through the first half of the year closed at 8.9%, with average asking rents at $76.45 per square foot, up 7.9%.

“Boosted by activity in Hudson Yards, the Midtown office market realized a surprising 30% increase over the 10-year average in office leasing,” said Kuriloff.

Overall in Manhattan through the first half of the year, financial services has accounted for 26.1% of overall leasing—for new leases and expansions of 10,000 square feet or larger—while the TAMI sector accounted for 20.4%. That compares to 14.3% for the financial services sector last year at this time and 40.1% for the TAMI sector.

Meanwhile, other submarkets also have benefitted from finance's resurgence, said Ken McCarthy, senior managing director, tri-state research. “We've seen smaller financial services tenants, like hedge funds, look at Midtown South but most of them are too big for space there so they're looking at Midtown and Downtown.”

The Midtown South and Downtown markets reached all-time highs in average asking rents at $66.86 per square foot and $58.25 per square foot, respectively. The Downtown vacancy rate through the first half of the year closed at 10.3%, while Midtown South continues to be the tightest Central Business District in the nation with a vacancy rate of 6.2%.

Throughout Manhattan, office leasing activity in the first half of 2015 has been quite strong, said Ron Lo Russo, president, New York tri-state region. Total new leasing reached 15.3 million square feet, with a vacancy rate of 8.8%, which marks the first time the vacancy rate has dropped below 9% since January 2009.

“We're on track for a very healthy leasing year backed by exceptionally strong new leasing activity in Midtown,” Lo Russo declared. “Of the 20 submarkets we track in Manhattan, 18 of them saw rent increases compared to a year ago, which is indicative of the depth and breadth of the strength of the market.”

The overall asking rent in Manhattan increased 8.8% year-over-year to $70.52 per square foot, marking the first time since November 2008 that the overall asking rent has surpassed $70 per square foot. The Manhattan class-A average asking rent totaled $75.83 psf, an increase of 7.2 percent year-over-year.

The retail market in Manhattan is going like gang busters too. Of the top 10 most notable transactions this year, six were retail brands entering the Manhattan market for the first time.

“Manhattan is a vital center for retail activity where we continue to see dynamic growth year over year,” said Gene Spiegelman, head of North America Retail Services. “Economic fundamentals are the drivers and play an integral role in shaping the urban environment.” Those drivers include tourism, employment growth and per capita income.

As for property trades, said Robert Knakal, chairman, New York investment sales, “the good times are rolling.” The number of properties sold through the first half of the year is down 7%, he noted, but sales volume is on pace to exceed $75 billion by year-end.

“The investment sales market continues to surge towards an all-time dollar volume record coupled with new value records in every neighborhood in the city,” Knakal said.