While certain companies are getting ready to bring back employees to their offices, the amount of available office space for lease in Manhattan has reached a record high, as stated in reports released on Thursday. This highlights how the sudden shift to remote work during the coronavirus pandemic is disrupting the city's commercial real estate industry. In Manhattan, where the two largest business districts in the country are located, 18.7% of office space is currently available for lease. This is an increase from over 15% at the end of 2020 and more than double the rate from before the pandemic, according to Newmark, a real estate services company. Many New York employers are now offering more flexibility to their employees, allowing for some remote work even as the pandemic eases, and reassessing their space requirements. Consequently, companies are continuing to terminate leases or look for new tenants at a steady pace. Certain areas, like Downtown Manhattan, are experiencing more challenges, with 21% of offices currently unoccupied, as reported by Newmark. Kathryn Wylde, the president of the Partnership for New York City, stated that New York City is currently facing its most significant crisis since the 1970s, when half of the city's 125 Fortune 500 companies relocated. She emphasized that the city is at risk of experiencing a similar exodus, which took 30 years to recover from. Wylde believes that New York must find ways to attract people beyond just office work. New York City, which used to draw 1.6 million daily commuters to its offices before the pandemic, is now grappling with the changing workplace more than any other city in the United States. The pandemic has also created challenges for the commercial real estate sector, a key component of New York's economy, as landlords are offering incentives like lower rent to retain and attract businesses. Additionally, property taxes, particularly from commercial properties, are a significant source of revenue for New York City, accounting for 41% of the total. Commercial areas nationwide are facing difficulties, but the office buildings in Manhattan are experiencing a higher rate of vacancies compared to other cities such as Atlanta and Los Angeles, which are showing signs of recovery from the pandemic. While New York's vacancy rate was above the national average of 16.2% at the end of March, other cities like Los Angeles and Chicago also struggle to fill their office spaces. Los Angeles has a vacancy rate of 24.1% and Chicago has a rate of 21.9%, both higher than New York's rate. However, these cities had higher vacancy rates prior to the pandemic. There are concerns that the situation in New York may worsen. According to CBRE, approximately one-third of leases at large buildings in Manhattan will expire in the next three years, and companies have expressed the need for less space. The availability rate in New York City is currently at its highest level since the mid-1970s, when the city was facing a financial crisis and the Manhattan skyline was evolving with the construction of towering office buildings like the Twin Towers. Franklin Wallach, a senior managing director at Colliers, predicts that the amount of available office space in Manhattan will continue to increase due to new construction and companies carrying out relocation plans announced before the pandemic. With about 14 million square feet of office space currently under construction in New York City, the market may rebound in varying ways in Manhattan. Neighborhoods near major transportation hubs such as Pennsylvania Station and Grand Central Terminal may recover quicker than other parts of Manhattan, according to Wallach. Savills, a real estate firm, predicts the Manhattan office market may not return to pre-pandemic levels until late 2022 or later. A survey found only 12% of Manhattan office workers had returned to their desks by the end of May, with over 60% expected to return by September. The technology sector has been the most active in signing leases in New York during the pandemic, with companies like Facebook and Google successfully transitioning to remote work. Facebook's CEO, Mark Zuckerberg, announced in June his intention to spend half of the next year working outside of the office. Wylde expressed that the tech sector's rapid growth seems to be temporary, with employees increasingly seeking permanent remote or hybrid work options. Workers are pushing for the ability to work from home to avoid expensive apartment leases in cities like New York, where they may only need to be in the office a few days a week. Wylde noted that other cities have become more appealing due to the pandemic and the rise of remote work, emphasizing the need for a shift in public policy towards prioritizing quality of life, a positive business environment, and affordability.