"Everybody's knee-jerk reaction this month has been wrong," said Simon Wasserberger, senior vice president of CBRE's New York tri-state region consulting group, referring to predictions that the demise of Lehman and other banks would dump massive amounts of sublease space on the market, causing big vacancy rate increases and sizable rent declines. "People underestimate the stability of Manhattan rents."

Mr. Wasserberger went on to argue that Manhattan is incredibly supply constrained. At most, there will be 7 million feet of new construction in the next four years, which, in addition to whatever sublease space comes on the market, will comprise merely a drop in the bucket that is New York's 400 million-square-foot marketplace.

Moreover, Mr. Wasserberger expects that a lot of firms will hold onto their excess space rather than sublet it, like they did last time the market went sour. They've learned the lesson that it's better to hold on to already leased space than have to go search for new space (and pay higher rents) in a couple years' time, when the market improves.

Mr. Wasserberger said that the worst-case-scenario, which he seems to consider unlikely, is job losses of more than 140,000, which would cause the vacancy rate to rise to just 12.5 percent by 2011 — that's a tenant's market, but hardly apocalyptic. In that worst-case-scenario, rents would decline by 26 percent by 2011.

"The perception is this market is dead and dying, and that's not true," agreed Stephen Siegel, CBRE's Chairman of Global Brokerage, who remarked that the supply is even further constrained by developers unable to secure credit for new projects not already in the pipeline.

"There are still deals being signed at numbers that will boggle your mind," Mr. Siegel said.

Analysts ticked off the usual litany of benchmarks showing downtown’s resurgence in the last five years: the low vacancy rates as compared to post–Sept. 11; the higher asking rents; the large leases, including the two biggest in Manhattan in 2006.

But, still, the money’s in midtown.

All of the most expensive recent Manhattan office leases have been in midtown, not in downtown (or anywhere else in the borough, for that matter). In 2006, according to the brokerage Cushman & Wakefield, companies and landlords signed 43 office leases where the rent was at least $100 a square foot—every last one in midtown.

So far in 2007, companies and landlords have inked a dozen $100-or-more-a-foot leases—again, all in midtown. This puts 2007 on a breakneck pace to smash last year’s record of 43.

Most of those 2006 leases were concentrated in certain areas within midtown itself, suggesting that the crème de la crème, as it were, is even picky at the submarket level. Forget Times Square—we want Madison Avenue!

Of the 12 this year, half were along Park Avenue in midtown, three were in the Rockefeller Center area on Sixth Avenue, and the remaining three were on Madison or Fifth avenues.

Of the 43 the year before, 23 were in Madison or Fifth Avenue addresses, and 13 on Park. The 11 leases in 2005 that had rents of at least $100 a foot were nearly all on Madison and Fifth in midtown, with one on Park. All such leases in 2003 and 2004—a whopping 14 total (to give you a sense of how successful the commercial market is now)—were in midtown.

All of the 21 Manhattan buildings that in 2006 commanded rents of at least $100 were in midtown.

The average rent in the submarket was $58.92 by the end of 2006, including sublease space. The best buildings in the most expensive midtown areas—Fifth, Madison and Park in the East 50’s and 40’s—averaged more than $86 a foot. The average rent in downtown now hovers around $38 a foot, according to Cushman & Wakefield, and only a very few buildings can command anywhere near the $100 that’s become a ho-hum benchmark in midtown.

This disparity in costs could, of course, ultimately benefit downtown. That’s the logic you’ll hear: Companies are supposed to see it as a bargain versus midtown, a last-stop-before-the-Holland-Tunnel way to avoid having to leave Manhattan. Maybe companies will plant back-office operations in New Jersey or in Brooklyn—but they can use downtown to keep a Manhattan address.

But will downtown landlords, those commanding the space at the sleeker top-tier towers, get to one day charge rents comparable to the bigger midtown players?

Look at the midtown towers, the better ones like 9 West 57th Street or the newer One Bryant Park, and see when those reach the topmost rents.

“Here’s the way to think of it: Typically, downtown rents are 35 and 40 percent cheaper than midtown rents, and that’s just based on about the last 15 years,” said Simon Wasserberger, a vice president at the brokerage CB Richard Ellis, which is handling the leasing at 7 World Trade Center for landlord Silverstein Properties. “If you want to guess when downtown is going to break $100, you have to think when the top floor at One Bryant Park leases for $160.”

The highest asking rent in 7 World Trade is now $75 a foot; and the 52-story, top-tier tower is more than half full of tenants barely a year after officially opening. It’s a top contender to lead downtown to the $100-a-foot benchmark provoking yawns in midtown, though it may be fully leased by the time that happens—and it is likely, despite midtown’s dominance now.

“That’s totally plausible,” Mr. Wasserberger said. “It’s just a matter of time.”