The rise of office workers spending some or all of their work weeks in remote locations has upended that part of the real estate market and raised questions about its future. Now a newly released study from New York’s largest real estate organization offers findings that show some signs of improving office use.

Between Tuesday and Thursday, same-day office employee visits in Manhattan, the top U.S. commercial market and a barometer for trends across the country, in the first five months of this year were found to have recovered to 73% of the pre-pandemic level in 2019. That's almost double the 38% rate in the same time a year earlier, according to industry lobbying group the Real Estate Board of New York.

In another indication of employees still working just some days in the office, same-day visitation rates on Mondays and Fridays, while showing an improvement of 20 percentage points each, trailed midweek at 61% and 47%, respectively, the REBNY study published Monday found. The report, citing Placer.ai mobile device location data, added that the contrast is observed regardless of building class.

While companies are figuring out ways to get more employees to return on Fridays, “there’s more room for improvement,” Keith DeCoster, REBNY’s director of market data and policy, said in an interview.

Any improvement in office use is closely watched by the commercial real estate industry because the property type has been hard hit by the economic fallout of the pandemic, and some nearby retail property demand has also been hurt as fewer workers can mean reduced sales. While the trade group has a vested interest in showing any sign of improvement, it also has the ability to draw firm data from its members.

The veracity of data and the methodology of various studies are watched closely because office usage is considered in determining property values. Another study, published just last week by global consultancy McKinsey & Company, found that behavioral workspace changes threaten a “severe and lasting impact” around the globe that's estimated to wipe out some $800 billion in office value in nine cities, including New York, by 2030 in just a “moderate” scenario.

That study found office attendance is still 30% below pre-pandemic norms on average in the nine global cities with workers visiting offices about 3.5 days per week. The comparison of usage percentage estimates is a post-pandemic phenomenon, DeCoster said.

“Before the pandemic, we probably wouldn’t have been too concerned about different ways of looking at the office utilization rate,” he said. “The discussion we’ve had more than a year now is how to track the office utilization rate. Folks assume that the goal line is 100% occupancy. [But] pre-pandemic, buildings were never occupied 100%. Employees weren’t coming to the office five days a week. I don’t think anybody really has a precise number what occupancy was pre-pandemic." He estimated it's probably in percentage terms in the "high 70s and low 80s.”

Besides the mobile location data from Placer.ai that REBNY uses, other attempts to track how offices are used include the high-profile utilization rate of a 10-city average by security firm Kastle Systems’ keycard swipe data and employer surveys by the Partnership for New York City.

Some landlords have said Kastle’s data doesn’t represent the total picture. For instance, major office landlords including Rudin Management, Brookfield Properties, Silverstein Properties, Rockefeller Group, Tishman Speyer, Boston Properties and Related Cos. don’t use Kastle’s system, the New York Post has reported.

Nevertheless, Kastle data has shown New York and the 10-city U.S. average office usage rates stalled and hovered around 50% after having improved from the worst since the pandemic sent workers remote working in 2020.

“It's become so complicated if you try to do the math” of where the office usage rate really falls, DeCoster said. He added that these different sets of data share a common thread: There’s a “a clear increase in building visitation rate over time." He said another major gauge of office use will come after Labor Day.

Still, while office use may have picked up from the low point relatively early in the pandemic, it may not be fast enough to offset the damages it’s already wrought on the office sector. Higher interest rates and tight financing have led some major real estate owners including Columbia Property Trust to default on a part of their office debt.

Fitch Ratings said recently office loan delinquencies in Fitch-rated U.S. commercial mortgage-backed securities transactions are expected to double to between 3.5% and 4% of total office loans at the end of this year from 1.8% in May as more maturity defaults occur. Only 30% of $1.15 billion in fixed-rate office loans on the CMBS market that matured through April this year were paid off, Moody’s Analytics said recently.

“It’s a very fluid environment,” RXR Chairman and Chief Executive Scott Rechler said in an online panel discussion hosted by McKinsey last week. “As the economy has gotten more challenging, there’s a tug of war between employees and employers to find that balance. ... If you have buildings that are obsolete, they become a liability.”

Uncertainty about the economy, which has led to tech and other industry layoffs, and higher borrowing costs have helped send office vacancies in New York to record highs and create a bigger divide between well-located buildings with appealing amenities, benefiting from the so-called flight to quality, and those that don’t.

Manhattan leasing in the first half of this year totaled 12.3 million square feet, well below the long-term average of 18.6 million square feet, Newmark said in a report published Monday. Pending construction deliveries totaled just 1.8 million square feet, the lowest pending total since prior to 2018, the real estate firm said.

Even as the flight to quality may be a bright spot, Class A office tenants are getting about a quarter of their total rent as concessions, including free rent and tenant improvement allowances, up from 17.1% pre-pandemic, Avison Young said in a recent study.

As employers seek to bring workers back to the office, mixed-use and multipurpose developments that can play a part in the 24/7 life employees want are more desirable, Diane Hoskins, co-CEO of architecture firm Gensler, said at the McKinsey panel.

Single-use buildings are “contributing to the exodus,” she said.

Besides tracking employees’ office visits, the REBNY study also offered some clue on the scars the pandemic has left on office-dependent businesses. Total building visitation rates, including both visits to the workplace by employees and visits to retail, schools, medical facilities, public open spaces and other nonoffice space uses in those buildings, recovered to an average of 57% of the 2019 level between Tuesday and Thursday.

That percentage doesn’t include tourist and other foot traffic just passing by a building. Among nearly 1,600 Manhattan office buildings with at least 10,000 square feet, there’s an estimated 21 million square feet in retail space, REBNY said, citing New York City Department of Finance data.

One reason the midweek total building visitation rate hasn’t recovered to the same level as the employee visit rate reflects the fact some of the retail space that was there pre-pandemic has closed, DeCoster said.

The study included 250 Manhattan office buildings, with 50 used for same-day comparisons.