It is quickly becoming a well-known story: vacancy rates in Midtown Manhattan are going down and rents are going up. If historical trends are any guide, this is only the beginning of a 5-year to 10-year cycle.

All this means that big companies leasing six-figure units of space in fancy new Class A buildings could be spending millions more annually in rent in the course of the next few years.

But the trend could also create a much more precarious situation for small companies paying far less in rent in more modest Class B office buildings: They could be out of their quarters entirely.

Inexpensive prewar buildings — some with outmoded electrical, telephone and cooling systems, single-pane windows and fewer amenities — are disappearing altogether as they are converted into residential condominiums. Also, no new supply is coming to market, as new buildings are built to Class A standards, even in outlying office areas like Hoboken, N.J., and Long Island City, Queens.

Availability of Class B space in Midtown has plunged by slightly more than 900,000 square feet in a year, to about 3.3 million square feet, according to research compiled by Cushman & Wakefield, the real estate brokerage firm.

What is left is being upgraded and taken by higher-paying tenants. This is putting the squeeze on small office renters in Midtown and Midtown South. Their rents could double or triple in the next couple of years, according to several brokers who represent tenants in the commercial office market.

In the last few months, smaller office users who are expecting to move have watched the supply dwindle.

Chris Capra is the director of Lotus Public Relations, a seven-person firm currently occupying 850 square feet in the Lincoln Building, at 60 East 42nd Street, directly across 42nd Street from Grand Central Terminal. Because the lease is going to expire in three months, Mr. Capra has been looking for new space. Even if the company could stay put and absorb the rent increase, there is no room to expand, because the building is almost completely occupied.

“We’ve noticed a lack of small space in the market, especially in Midtown,” Mr. Capra said. He is looking for about 1,500 square feet but is not finding blocks of much less than 2,000 square feet in Midtown. “And compared to a couple years ago, rents have really increased.”

According to figures compiled by Newmark Knight Frank, another brokerage firm, tenants using less than 6,000 square feet occupy 90 percent of all space in Manhattan. Seventy-five percent of Manhattan’s office tenants need less than 2,250 square feet.

Yet, the incentive for owners of traditional Class B office buildings is to combine and renovate space to capture higher rents. Consequently, the availability of affordable Class B space in the greater Midtown market continues to dwindle.

“We embarked on a program to upgrade all of our Class B buildings in 2002,” said Anthony E. Malkin, a principal owner of W&H Properties, which owns the Lincoln Building.

Mr. Malkin explained that lots of small spaces result in long hallways (which require upkeep and do not generate revenue), and each space needs its own electrical and air-conditioning systems.

Now that Class B buildings can get more than $40 a square foot, it has become even more profitable to upgrade and consolidate. The average rent is $37.72 as of midyear, compared with $35.15 a year earlier, according to Cushman & Wakefield.

APF Properties is a much smaller private real estate firm that specializes in buying Class B buildings and upgrading them. “There’s less space, more people looking, and that is a nationwide trend,” said Berndt Perl, one of two principal owners of APF Properties. “But in Manhattan, that trend is more pronounced.”

APF has already repositioned 1156 and 1414 Avenue of the Americas, where asking rents are $49 a square foot, well above the average for a typical Class B building. The firm is about to close on the purchase of 24 West 57th Street; it will be renovated and smaller spaces will be combined to maximize efficiency.

For smaller Class B tenants and the brokers who represent them, however, all this activity in the greater Midtown market is becoming untenable. Josh Dionne, senior managing director of Ellman Realty Advisors, a firm that represents tenants only, is counseling his Class B clients to start looking 18 months to two years before a lease is set to expire and to negotiate on several spaces at once, knowing that there will be competition for it.

“And if someone has three years left and needs room to grow, I recommend to my clients to get out of the Midtown market if you don’t need to be there,” Mr. Dionne continued. “Sublet your space because that’s a strong market, and find where you want to be and move there now.” Options include Lower Manhattan, the garment district and Long Island City.

Some tenant representatives do wonder if the Midtown market might become too unbalanced.

“I don’t know if a market should be so dependent on tenants that can pay a premium to be there,” said Marcus J. Rayner, a principal of Cresa Partners, another firm that represents tenants. “Putting all your eggs in one basket — is that a scary thing? Probably is.”

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Nearly 20 percent of the Hub’s commercial real estate is vacant, and rents have dropped dramatically since the fourth quarter of 2008, according to new data.

For many tenants, it’s time to play let’s make a deal.

“It’s the economy, stupid,” said William F. McCall, president of McCall & Almy, a Boston brokerage that exclusively represents tenants. “We are not creating jobs. The main reason tenants move is because they are growing, and no one is growing in this economic environment.”

Average asking rents in the city’s central business district plunged to $44 per square foot in the fourth quarter, a 21 percent drop compared to $56 for the same period last year, according to CB Richard Ellis, a global commercial real estate firm.

At the same time, the amount of space available in the downtown swelled to 18 percent, up from 13.7 percent at the end of 2008.

The latest data reveals rents fell and vacancies increased in every major Boston sub-market, including the Financial District, Back Bay, Seaport, Charlestown, North Station and South Boston.

McCall said he encourages landlords to negotiate better terms with existing tenants or they might wind up with more empty space.

“I tell landlords they would be crazy not to lower the rent,” he said. “More space is coming vacant soon.”

Ropes & Gray will be vacating 400,000 square feet at International Place in 2011 as the large law firm moves to the Prudential Center, McCall said.

Joseph Fallon is still trying to fill his new 500,000-square-foot building on Fan Pier and Boston Properties is seeking tenants for its soon-to-be-completed building at Russia Wharf.

“Tenants have lots of choices,” McCall said.

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