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Maximizing Efficiency: Evaluating Office Spaces for Lease Renewals

May 10th, 2024 | 6 min. read

Maximizing Efficiency: Evaluating Office Spaces for Lease Renewals
VergeSense

VergeSense

VergeSense is the industry leader in providing enterprises with a true understanding of their occupancy and how their offices are actually being used.

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As businesses navigate the post-pandemic landscape, one question looms large: what to do with our office spaces? While the return to the office is underway, occupancy levels have not rebounded to pre-pandemic levels, leaving many office spaces underutilized. 

This situation presents both a challenge and an opportunity. On one hand, underutilized office space means wasted resources. On the other hand, it presents an opportunity for significant cost savings and optimization.

In this blog, we outline everything you need to know to properly evaluate your office space before you renew your lease. We’ll delve into the key factors to consider and provide practical steps to help you make informed decisions. Whether you're looking to downsize, rightsize, or simply optimize your office environment, we’ll give you the knowledge and tools you need to maximize efficiency and minimize costs.

Why Evaluating Office Spaces Matters

Evaluating office spaces before lease renewals is more important than ever. Here’s why:

  • Cost-saving Opportunities: Rent and associated expenses continue to accumulate even when office space goes unused. By identifying areas of low utilization, you can make informed decisions about downsizing or reconfiguring your office space, reducing overhead costs significantly.
  • Adaptation to Changing Business Needs: Evaluating office spaces allows you to assess whether your current workspace aligns with your evolving business needs. This evaluation can lead to adjustments in office layout, amenities, and policies to better support your organization's objectives and work processes.
  • Enhancing Productivity and Employee Satisfaction: The design and layout of an office space can have a profound impact on employee productivity and satisfaction. By evaluating office spaces, you can identify areas for improvement and make adjustments to create a more conducive and productive work environment.
  • Aligning Office Spaces with Employee Needs: By understanding how employees use the office space, you can tailor the environment to better meet their needs, leading to increased satisfaction, engagement, and retention.

Metrics to Evaluate in Office Spaces

To make informed decisions about your office spaces, it's crucial to evaluate key metrics that provide insights into space utilization, layout efficiency, and overall effectiveness. By analyzing these metrics, you can identify areas for improvement, optimize your workspace, and ensure you're getting the most out of your investment.

Here are three critical metrics to look at: 

1. People Count and Floor Level

Understanding the number of people present in your office space at any given time is essential for optimizing capacity and usage.

The Occupancy Intelligence Platform lets you capture people count at both the building and floor level, giving you insights into peak occupancy times, average utilization rates, and trends over time.

With this data, you can compare actual usage with workspace capacity. This helps you identify and shed underutilized spaces or make updates to office policies. It also enables you to make confident decisions about expanding or shrinking portfolio footprint to accommodate actual space usage.

2. Active Space Usage and Passive Space Usage

Beyond counting people, it's crucial to differentiate between active and passive space usage.

  • Active occupancy refers to areas where employees are actively engaged in work, such as desks, meeting rooms, and collaboration spaces. 
  • Passive occupancy refers to a space that is in-use and occupied by the presence of common objects (like a coat or laptop) even if a human isn’t present at that very moment.

VergeSense's occupancy intelligence provides insights into both active and passive space usage, allowing you to identify areas of high activity and areas that may be underutilized. With this data, you can pinpoint opportunities to optimize layout and design, such as redesigning existing spaces to better support employee needs or implementing new booking protocols.

3. Capacity Usage

Evaluate whether your office space is being used to its full potential or if there's excess capacity that could be repurposed or eliminated.

The Space Usage Timeline allows you to analyze the usage of space and availability through the lens of space types like buildings or floors over time. This data can be used to pinpoint potential office breaking points, like space shortages, and can inform important portfolio decisions like:

  • If you need to expand the physical footprint of your office or move to a new location
  • If you should repurpose or redesign underutilized areas into more popular space types 
  • If you require space booking automation to help alleviate space shortages

We know how much is on the line when making important portfolio decisions. The Space Usage Timeline allows you to back major office decisions with real data, and create a seamless workplace experience that aligns with employee needs and expectations.

Making the Final Decision: Shedding Space

Ultimately, your goal is to evaluate your office space to see if you should shed space. Here's how to approach the decision-making process:

1. Assess Current Space Utilization

Start by analyzing occupancy rates and usage patterns throughout your office space.

  • Analyze occupancy rates over time.
  • Understand usage patterns over time, such as peak times for meetings, break periods, and areas of high collaboration.
  • Identify underutilized areas. This could be entire floors, specific collaboration rooms, or individual workstations.

2. Consider Implementing Space Optimization Strategies

Before making a decision to downsize or move locations, consider implementing space optimization strategies to make the most of your existing space. Some actions you can take include:

  • Flexible Workspace Arrangements: Explore options such as hot-desking and remote work to optimize space usage and accommodate fluctuating employee numbers.
  • Subleasing Unused Space: If you have unused space, consider subleasing it to other businesses to generate additional revenue and offset costs.
  • Redesigning Office Layout: Redesign your office layout to improve efficiency and collaboration. Create versatile workspaces that can be easily adapted to different tasks and team sizes.

3. Consider the Cost of Eliminating Space

If certain areas of your office space are simply going unused, consider the cost savings that could be achieved by eliminating them altogether. This could involve downsizing to a smaller office or consolidating floors.

Before going this route, you must consider factors such as lease terms, rental rates, and operating expenses to determine the financial impact of downsizing or consolidating. Work closely with your finance team or real estate advisor to conduct a thorough cost analysis and evaluate the long-term financial implications of each option.

Make Better Decisions with VergeSense

Occupancy data is a powerful tool that can drive informed decision-making and unlock key insights into your office space. By analyzing occupancy rates, usage patterns, and other metrics, you can gain a deeper understanding of how your workspace is utilized and identify opportunities for optimization.

Before making impactful choices like eliminating a floor or office, it's crucial to ensure that your team has what they need and that you're not inadvertently removing essential resources. By taking a data-driven approach, you can make strategic decisions that maximize efficiency, minimize costs, and create a workspace that supports your organization's goals and objectives.

To learn more about using AI to make data-driven decisions and optimize your workplace, visit our blog.