A real estate executive showed us a building in Washington,

right in the middle of the international financial district and just blocks from the White House.

"The World Bank goes for three blocks in this direction... this here is the IMF..."

Lanier's real estate business owns high-end offices, hotels, and apartments, mainly in Washington.

The company has around 3 billion dollars in assets overall.

But during the pandemic, remote work became normalized.

Lanier says rental income for this building dropped to zero after a big law firm moved out in March.

"There were 630 people working here, and they're all gone.

Every office you see, every desk you see is vacant."

The building's assessed value dropped by over 30 percent last year.

Lanier put up a large ad to attract tenants.

It touts the flexibility of month-to-month contracts, with rent nearly half of what it was before.

But that hasn't brought in any takers.

There are similar problems around the country.

The situation is perhaps worst in San Francisco, home to many big tech companies.

The office vacancy rate rose to a record high in the first three months of this year.

It was far above the level in 2010, during the recession that followed the global financial crisis.

Remote work isn't solely to blame.

There is also the impact of mass layoffs that have swept through the tech sector.

As workers leave the city, restaurants and retail businesses are forced to close down.

A financial market analytics firm says declining rental income

means more real estate developers won't be able to repay their loans.

The firm's data show the nationwide delinquency rate for office space loans rising steadily.

"I think we're going to see a continued increase in the office delinquency.

We are starting to see the effects of the higher interest rate environment really impact property performance.

I think we're just on the front edge of the distress in the marketplace."

Loan delinquencies undermine the financial institutions that provide them, and that's unsettling regulators.

"There's a substantial amount of commercial real estate in the banking system.

A large part of it is in smaller banks.

We do expect that there will be losses, but they'll be,

they'll be banks that have concentrations, and those banks will experience larger losses.

So we're well aware of that. We're monitoring it carefully."

The impact of remote work on commercial real estate is causing jitters for small and mid-sized banks.

That's adding to instability in the financial sector,

still reeling from the bank collapses just a few months ago.

"All of us feel the urgency of the needs that are happening in our schools and our communities."

In March, there was a huge protest in Los Angeles.

Around 10,000 teachers and public school staff came out to demand better working conditions.

The teacher shortage is especially acute in rural areas,

where local governments lack financial resources due to an outflow of people and other reasons.

Local governments don't have the funds to improve teachers' conditions, including their pay.

That's making the shortage even worse.

School districts are left with little choice but to switch to a four-day week.

A researcher at Oregon State University led a joint survey with other universities around the U.S.

It found that a four-day week had been introduced at 1,600 schools in 24 states.

"If you look at the percentage of students who are attending school on a four-day school,

that's still pretty small, but the number of school districts is definitely growing."

Kingsville is a small city in southern Texas, a region struggling with a lack of tax revenue.

The school district is introducing a four-day week starting this summer.

But that makes it harder to meet the annual minimum number of hours required by the state.

So, the district plans to increase the number of hours in each school day.

Friday will be the day off.

But some parents at a recent information session expressed concerns.

"The expectation is that they're going to be in school way too long.

And that's also worrying too because I have two young kids, are 8 and 10.

So, they're not exactly like once you sit at a desk for like 10 hours straight."

In the end, the district decided on a four-and-a-half-day system,

with half of Friday set aside for other activities.

The authorities worked with local colleges and nonprofits

to use that time for physical education and clubs to learn math and other subjects.

"There are maybe certain groups of people that are not used to change

or they're afraid of changes work very hard with our community

to make sure we have opportunities that are free."

In other areas where a four-day week has been introduced,

schools have figured out how to achieve positive results.

This high school in a Denver suburb introduced a four-day week five years ago.

Mondays rather than Fridays are the day off.

The aim is for students to play sports on weekends,

rest up on Mondays, and come back fresh on Tuesdays.

"I have more time to focus on my own hobbies and more time to focus on art, sewing, music,

anything else I'd really want to do."

The high-school graduation rate has reportedly improved.

The district also has had more success attracting and keeping teachers.

"They find out that there's a school district near Denver.

That's on a four-day week, and they relocate.

We say our little slogan is: Give 27J four days a week in Colorado the rest."

For many schools, the old methods of teaching are no longer working.

That means local authorities need to explore new styles of education,

bringing in support from communities and families.

Capsule toys are seeing a massive surge in sales

and are proving popular with both Japanese consumers and foreign tourists.

And towns and cities across the country are creating now capsule toys based off of famous local places and products.

Today's On-Site Report features businesses that are capitalizing on these trending tiny toys!

This mall is located in the heart of Shibuya – one of Tokyo's best-known shopping and entertainment districts.

Nearly two-thirds of the 5th floor are now home to over 600 capsule toy machines.

Each month, it attracts nearly 100,000 customers and averages about $120,000 in sales.

"I got a sloth. It's the one I wanted the most!"

With 50 locations across Japan, Tsuzuki Yusuke is continuing to look for new places to place his machines.

"As you can see, we have lots of people coming in even on weekday afternoons,
so, we're doing quite well!"

The company's Shibuya location opened in July of 2020.

At the time, the pandemic had caused customers to disappear,

and many tenants were forced to close up shop and leave.

Since shopping there didn't require any close contact with store staff or other customers,

people felt more comfortable coming in.

"I think the capsule toy store really helped bring shoppers into our building,

that otherwise wouldn't have come during the pandemic."

By offering a variety of different products, the shop is able to attract a broad range of customers.

For example, currently, these $2 octopus leg earplugs are among the store's best-selling products.

A vast range of toys, including characters from comics and anime,

mean there is something for people of all ages.

Each month, 450 new brands of toys arrive.

With the chance of getting something different every time,

some regular customers visit the store on a daily basis.

"Since we offer toys that appeal to nearly all types of people and to almost any age group,

retail space owners have realized that this type of product

has great potential for yielding high sales per square meter."

Since travel restrictions were lifted, foreign tourists now make up half of the store's foot traffic.

"So cute and squishy."

"Picking ones that you like but you don't know which one you're going to get still.

And but the surprise of it is a lot of fun."

The Shibuya store overlooks the busiest crosswalk in the world.

Customers find it the perfect background for taking photos of their toy capsule trophies.

Many of which end up catching the eyes of social media users from all over the globe.

With the increase in tourists, Tsuzuki is now turning his focus on international airports.

He recently set up an array of machines inside a souvenir shop,

and they have already noticed a significant increase in foot traffic.

"Before leaving Japan, I'm using all of my leftover change on capsule toys."

Tsuzuki hopes that spending leftover yen on capsule toys will become a trend with foreign tourists.

On the day we visited, one traveler chose to spend all of her remaining yen on capsule toys

and bought nearly $20 worth of small souvenirs.

Tsuzuki says that the sales figures for machines placed in airports are four times higher than average.

"If capsule toys continue to grow in popularity, I think they could play a huge role

in attracting people to Japan and supporting the tourism industry."

Costing about $2 per spin, some people will keep going until they get the toy they are after.

"That's the one I was after!"

The prize? A keychain featuring a motorcycle helmet made by a world-famous manufacturer located here in Omiya.

"You don't find many capsule toy machines offering Omiya-related goods like this.

I love my hometown, so this really made my day!"

Serving as one of the stops for the bullet train, Omiya has long flourished as a major transportation hub.

The capsule toys she is collecting are part of a special series of key chains

featuring famous places and products related to Omiya.

The series was created by Nakajima Yoshio,

a manager of a large shopping center located in front of the station.

When the number of shoppers dropped by 50% during the pandemic,

he set out to come up with a way to support the local community.

"I wanted to make something they had never been seen before

- capsule toys related to places and things that only Omiya locals would understand

– something to lift their spirits."

One of his first choices was a famous local café

that's been open 24 hours a day, 7 days a week for nearly half a century!

And the key chain? ... a replica of the café's retro sign!!

The view of the main gate to Omiya's 2,500-year-old Hikawa Jinja also made the cut.

Since launching in March of 2021, they have become a huge hit with locals.

To date, more than 80,000 keychains have been sold.

The success led government officials from the nearby Yono region

to reach out to Nakajima for help creating their own local toy capsule products.

One of the first candidates to make the list was a local dessert shop.

The shop's most famous product is a frozen dessert bar

that thanks to some added starch can be enjoyed for 20 minutes without melting.

But rather than the dessert itself, they chose to memorialize the shop's banner.

When the owner placed a toy capsule machine outside the store,

he instantly saw an increase in customers.

Some would keep buying capsules until they finally got the miniature version of the store's banner.

Many would also take a photo of the keychain alongside the real banner and post it on social media.

"Since I love Yono so much, I want to collect them all!"

This has led to even further free promotion,

and since the keychains have been released in toy capsule machines across the area,

the shop has seen a 50% increase in sales.

"It's been amazing. I never expected to have this many people come to our shop.

Just seeing it made us all really happy."

The locally themed trend has continued to spread to other parts of Japan.

Today, Nakajima was visiting Hamamatsu, a city about 90 minutes west of Tokyo by bullet train.

He met with representatives of a department store as well as a sweets producer

to discuss creating a new locally themed capsule toy lineup.

"We wanted to do something fun for the kids and freshen up our floor space."

The product they chose to represent them – a crab-shaped bread

that's long been a favorite with young children.

"I think even tiny toys like these can generate huge amounts of enthusiasm,

so I hope this trend will continue to spread through other regions across Japan."