Prices fell across Manhattan, where the average asking rent was $76.80 per square foot during the second quarter, according to a report from Avison Young. That is more than 3% lower than last year.

The pricing trend was driven in part by a bifurcation in the market. Space being built in such areas as Hudson Yards is commanding huge rents, while the majority of product that is not up to that standard is getting left behind.

"The taking rents for much of this newer product is typically higher and can reach in the triple-digits on a per-square-foot basis," said Marisha Clinton, Avison Young's senior research director for the tristate area. "As a result, the less modern product that is left comes with a lower asking rent."

Vacancy, which increased slightly and remained high around 10%, is exacerbating the slide. More space is sitting empty as firms squeeze the same number of workers into a smaller area. In addition, new supply is coming on the market downtown and on the West Side.

Leasing activity, however, was way up during the second quarter. Tenants inked deals for 9.4 million square feet, a 70% increase from the same period last year and about 25% above the five-year quarterly average. The trend was driven in part by big blocks of space taken by companies including Pfizer, whose lease ranked second on Crain's list of the largest so far this year (see page 15). The health sector has posted some of the strongest job gains in the city.