In the last few years, many tenants held off looking for new space, waiting to see if rents would drop even further.

"Between 1990 and 1991 rents have dropped 10 percent," he says.

On the far side of town, in the east 40's near the United Nations, rents are also dropping.

"Now they've heard the rents have dropped and a lot of landlords are getting desperate."

Their rent dropped to $1,500 a month from $6,000.

Indeed, rents have dropped steadily, yet space has barely moved.

As of last month, there were still 1.3 million square feet available, and the average rents had dropped to $7.88 a foot.

Under a complicated formula, the rent dropped to $3.5 million in 2002.

When she did, her monthly rent dropped to just $63, from $350 on the private market.

Either way, average rents will almost certainly not drop with house price falls.