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U.S. return-to-office rates hit pandemic high

Yahoo Finance Live anchors discuss the reported numbers in return-to-office attendance numbers and public transit occupancy.

Video Transcript

[AUDIO LOGO]

RACHELLE AKUFFO: All right. Well, shifting gears, last week, the US return-to-office rates reached their highest level since the start of the pandemic. We saw that average office use was 47.5% of early 2020 levels. That's according to Kastle systems which tracks these security swipes into corporate buildings. Now, commuter levels in the New York area also reached all-time highs since the pandemic.

We're also taking a look at over 200,000 people who rode the Long Island Rail Road last Wednesday, and nearly 175,000 people took the Metro-North Railroad. Now, of course, despite those positive signs, US office vacancy stands at 12.4%, and that's the highest it's been in the pandemic. So, Seana, obviously we see a lot of people coming back to work, but they also have these vacancies as well, really trying to understand what's happening with these return-to-office rates.

SEANA SMITH: Yeah, it's an interesting dynamic here at play. Certainly, I think, for people, we come into the office, obviously, five days a week. So you did notice right after Labor Day that more and more people were commuting with you, whether it was on the train or on the bus or simply in the subway system.

Although we do have a long ways to go when you take a look at those occupancy levels. Like you just referenced, they're slightly below 50%. So, yes, more people are in the offices than they were maybe three to six months ago. But, Dave, we have a long ways to go if we ever get back to those office occupancy levels pre-pandemic. I'm not so sure we're going to get back to that level. But it will be interesting to see just how close we come.

DAVID BRIGGS: Yeah, I don't think it's even an if at this point. I think the question is, how close do we get? We'll never get near 100%. My guess is that, just talking to developers and talking to agents, I think they'll get 60%, 70% of pre-pandemic, and that's going to be the new norm.

So what do you do with that then real estate will be an interesting question. I think with cities like New York City, Mayor Eric Adams would like some way to find to convert some of that office space into housing, into rentals, into affordable housing to solve that rental crisis that's going on. That's not an easy fix. It's not an easy conversion.

But it is interesting we focus so much on New York. The biggest increase was in Houston, Texas--

SEANA SMITH: Yeah.

DAVID BRIGGS: --which had seen a lot of plateauing. They saw a 10% increase in Houston. Anecdotally, I have a town that commutes entirely to New York City. It spiked right away after Labor Day and immediately dropped back off considerably. It was a quick surge, and then seemed to fall off.

SEANA SMITH: Yeah, and it's also going to be interesting to see how employers are able to get their employees back to the office because, yes, maybe some people are willing to come in one or two days a week. There's a lot of people that don't want to come back in more than that, go back to four to five days a week, and how exactly that's going to look too.

And, of course, we've heard at least some of the bigger players in the financial sector take a harder line when it comes to bringing their employees back and when the timeline that they're hoping to do so. Some tech giants, Tesla also weighing in, saying that they want their employees back into the office. So maybe we are progressing towards a 60% to 70%. Dave, I do agree with you. We're never going to get back to that 100% levels that we saw pre-pandemic. We are a far ways off.