Axios Markets Reporter Emily Peck sits down with Yahoo Finance Live to break down plateauing office occupancy rates as work-from-home options continue to be prevalent, while also commenting on how Silicon Valley Bank attributed remote work as a business risk ahead of its collapse.

Video Transcript

SEANA SMITH: The battle over remote work is having a huge impact on commercial real estate. Office vacancy levels are nearing their highest level that we've seen since the 1980s. This is all according to new data out from Moody's Analytics. And that's due to several factors, among them the rise in remote work and also this higher-interest-rate environment.

Let's talk about it with Emily Peck, Axios markets reporter. Emily, it's good to see you, and I know you've been digging into this report from Moody's. Just paint a clear picture for us. How dire is the situation right now within commercial real estate?

EMILY PECK: So I wouldn't say it's dire. Commercial real estate never gets to dire. It's been sort of this slow-moving crisis unfolding over the past one or two years where, you know, we're all working from home. I'm home right now. Companies need less office space. Offices-- vacancy rates are creeping up, and at the same time, interest rates are rising, making it harder for landlords to keep going. So we have seen a slight increase in some landlords, you know, defaulting, walking away from certain buildings.

DAVE BRIGGS: Are we seeing a plateau when it comes to the return to office, or is it still a moving target?

EMILY PECK: I think we're getting to a new status quo, a plateau, just like you said. In some cities, offices are about 50% of where they were before the pandemic, and those numbers really aren't going higher. So there's kind of like a-- there's basically a reckoning going on right now in the space. Everyone's coming to terms with the fact that, you know, there is no going back. Remote work is here to stay. Companies don't need as much office space as they used to.