Remote work was already gaining popularity before the pandemic, doubling about every 15 years. However, with the 2020 shutdown in the U.S. we suddenly had to face roughly 40 years’ worth of remote work evolution nearly overnight. Five years on, that rapid shift has led to companies like yours increasingly adopting flexible, hybrid options for where employees work.
Even with some organizations implementing more rigid return-to-office policies, vacancies remain at an all-time high, tipping over a 20% vacancy rate for the first time ever in 2024. If you’re sitting on unused office space, it’s time to evaluate what your business and employees’ needs currently are.
This guide digs into specific reasons why it might be time for your business to either reduce or repurpose an office, with tips for maximizing unused space. Keep reading for a look at how data and technology are working to future-proof your company’s real estate.
Related Read: The High Cost of Empty Offices: Corporate Challenges and Smart Tech Solutions
3 Reasons to Reduce Your Real Estate Footprint
The way we work is continuing to evolve post-pandemic and that means physical office usage is too. Here are three reasons you may need to reduce your real estate investment and footprint.
1. Office Utilization Rates Consistently Stay Low
In most cases, this is a no-brainer. Employees are increasingly choosing remote work options, so the number of people regularly coming to the office everyday dwindles. This means desks remain empty more often than not, meeting rooms might go weeks at a time without use and overall, there’s too much “dead space”. When office utilization remains low, it clearly points to wasted space and wasted investment on real estate that is more than your business needs.
2. Real Estate Costs no Longer Align with the Business Value
Having commercial real estate is typically a significant line item in your business budget. But, if you can tie that investment to things like better productivity, employee retention, talent acquisition or stronger relationships with clients and partners, then the investment is worth it. When you start to struggle with seeing these returns and real estate expenses start to consume more and more of your operational budget, it’s a sign that downsizing may be the right next step.
3. Organizational Changes Lead to New Workspace Needs
When your business undergoes a strategic shift, such as implementing remote-first policies or even having to do layoffs, those represent critical points to re-evaluate what your physical office needs may be. Changes in the size of your workforce, such as a reduction, investment in remote collaboration tools and even pivots in how your company does business can all reduce the need for an office. Regular assessment here is critical as sticking with current portfolios, even with these kinds of changes, often leads to unnecessary overhead that strains company budgets and leads to unfulfilling employee experiences.
Related Read: Recognizing the Shift in Workplace Dynamics
3 Reasons to Repurpose Physical Office Space
Unused areas of an office don’t automatically mean you need to downsize. If a significant portion of your workforce is still coming in multiple days a week and new business directives dictate the need for your office, it could be time to rethink how it is being used versus getting rid of it. Here are three common reasons that may require office space to be repurposed.
1. Changes in Employee Work Patterns at the Office
Your employees may still be coming to the office regularly, but how they choose to work while on site may have changed. Think about this: Are individual desks often empty, but meeting rooms and common areas are regularly booked up? Reconfiguring the office to provide more places for collaboration would be a smart move. On the flip side, say you have an office in a city with smaller living spaces. Employees may be coming to the office for a more structured place to work in. In that case, more options for private desk usage would be useful. The key is to consider the regular patterns employees choose for their workday and make the real estate you have fit those needs.
2. New Business Needs that Require Different Uses for Existing Spaces
Strategic business initiatives are shifting often, and many still require an office footprint to work. For example, the need for innovation labs, client experience centers and training facilities all require physical space to be successful, so retrofitting parts of existing real estate helps to support these objectives. This gives you the opportunity to focus on new layouts driven by employee wellness, hybrid work policies and sustainability goals.
3. Company Focus on Strengthening Culture and Employee Engagement
When culture and more natural face-to-face interactions are the goal, you want to repurpose existing areas to accommodate that. It’s important to balance flexible space for intentional gathering with spots that are more functional for focused or solo work. Designated zones for in-office events and amenities can help employees feel more connected outside of their own daily work.
5 Tips to Better Manage Underutilized Space
The need for commercial offices is shifting on a fundamental level due to hybrid work environments. Data from Cushman & Wakefield shows that by the time we hit 2030 there will be 330 million square feet of redundant office space, on top of the estimated 740 million square feet of real estate that is considered as normal vacancy. You can keep your office space from becoming obsolete, though.
Here are five tips that can help you repurpose and better manage underutilized areas at the office:
- Do a space utilization analysis. Occupancy sensors, badge data and employee surveys can help track how often specific areas are used, clearly showing space that is consistently vacant so you can make adjustments.
- Implement flexible workstations and hot desking. Cutting down on the number of desks and using shared or reservable workstations can help optimize usage, especially in hybrid environments where employees may not be in the office every day.
- Designate places for collaboration and employee wellness. To better align with how your employees want to use an office, consider converting underused areas into lounges for team collaboration, wellness rooms for employees to take a break or even quiet focus areas to enhance the in-office experience and promote more intentional attendance.
- Share excess space or sublease the office. In some cases, a downsize may be necessary, but might not be immediately possible due to leasing agreements. If that’s the case, you can sublease unused office space or partner with other businesses to share, generating a way to save costs while being flexible.
- Make sure real estate and workforce strategies are aligned. Office space decisions should be integrated with HR and business planning to reflect current needs and anticipate future ones. You should regularly review headcount, hybrid policy updates and business growth foals to maintain this cohesion.
Related Read: Four Strategies to Boost Productivity with Space Management
Anticipate Future Demand: Putting Data and Technology to Work
Work environments across industries remain fluid, so futureproofing your office and real estate investment begins with turning raw data into actionable, real-time insight. Forward-thinking companies are using workplace analytics tools to track patterns in usage, employee behavior and mobility trends. Space management software like Accruent Space Intelligence (ASI), can help your business go beyond where people are working to understand how, when and why.
Looking at insights around evolving team dynamics and workforce preferences can help you understand space needs months or even years ahead. Putting this data to work lets you proactively optimize your real estate portfolio, testing flexible layouts, adjusting amenities and shifting resources based on real-time insight. You can make more strategic, long-term plans for your real estate that account for flexibility and agility without compromising employee experience. Solutions like ASI enable scenario planning so you have data-backed plans already in place should hybrid work further accelerate, team size increase or leases come up for renewal.
The bottom line is this: it’s not enough to respond to change. You must anticipate it and be ready to both adapt to it and capitalize on it. Integrated technology and real-time data are how you make that possible.
To learn more and see how you can get the most out of your office space, download our eBook.
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