Available office space in Manhattan climbs to another record high.

Manhattan’s office vacancy rate of 18.7 percent is the highest in half a century and underscores the challenges New York faces in its recovery.

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Available office space in Manhattan climbs to another record high.

A third of leases at large Manhattan buildings will expire over the next three years, according to analysts, and companies have made clear they will need significantly less space. Credit…Vincent Tullo for The New York Times

July 1, 2021, 5:44 p.m. ET

Even as many companies bring workers back to their offices this summer, the amount of office space available for lease in Manhattan has soared to the highest rate on record.

Across Manhattan, home to the two largest business districts in the country, 18.7 percent space of all office space is available for lease, a jump from more than 15 percent at the end of 2020 and more than double the rate from before the coronavirus pandemic, according to a report released on Thursday by Newmark, a real estate services company.

Some neighborhoods are faring worse, such as Downtown Manhattan, where 21 percent of offices have no tenants, the company said.

The overall availability rate is the highest since it started being tracked in the mid-1970s, when the city was facing a financial crisis and the Manhattan skyline was being transformed by the rise of towering office buildings like the Twin Towers at the World Trade Center.

Despite some positive economic indicators, companies in New York City continue to end their leases or offload their leases to other tenants at a steady pace, underscoring that the tremendous shifts in the way people work have already become a lasting legacy of the pandemic.

The real estate firm Savills said the Manhattan office market was not likely to rebound to prepandemic levels until “late 2022 or beyond.”

No city in the United States must confront the changing workplace more than New York, where offices before the pandemic attracted 1.6 million commuters every day and helped sustain a swath of the economy including shops, restaurants and Broadway theaters. The pandemic also has placed monumental pressure on the real estate sector, a pillar of the New York economy, as landlords have rushed to redesign offices and dangle incentives like lower rent to retain and attract companies.

But there are signs things could get worse for landlords. A third of leases at large Manhattan buildings will expire over the next three years, according to the real estate firm CBRE, and companies have made clear they will need significantly less space.

At the end of May, just 12 percent of Manhattan’s office workers had returned to their desks, according to a survey of companies by the Partnership for New York City, an influential business group. More than 60 percent of workers are estimated to return in September, the group said, but many companies will allow their employees to work remotely at least several days a week.

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