NYC’s Slumping Office Market Faces New Concern as WeWork Wobbles

The collapse of WeWork Inc.’s second act is threatening to cause more pain for an embattled commercial-property market.

WeWork’s warning on Tuesday that there’s “substantial doubt” the firm will be able to stay in business is another potential blow for landlords and lenders, particularly in markets such as New York City.

The coworking company occupies more than 6.8 million square feet (632,000 square meters) of real estate in Manhattan, according to first-quarter data from Savills Plc. That’s more than two times the amount of space in the Empire State Building.

“There’s going to be a lot of ...