How Can I Use Occupancy Data to Optimize My Portfolio?
Erin Snider is a product expert at VergeSense. She has a degree in communication technology management from The Ohio State University and aims to use writing as a means of breaking down walls and creating transparency for customers.
Today’s world is one where occupancy is inconsistent, unpredictable, and dynamic. Last year, global occupancy increased by 257%, but was still only at 58% of pre-pandemic levels, and even with this increase, it still remains inconsistent from company to company, building to building, and day to day. As a result, optimizing for real estate cost and employee experience has never been harder and the effects of this inconsistency are being felt in every building as real estate leaders are left with uncertainty about the size of their portfolio.
So how do we address these unprecedented challenges? It starts with a shift in mindset.
The old way of right-sizing your portfolio doesn't work anymore
In the past, portfolio right-sizing was based on the total amount of office capacity (typically calculated by square foot per employee) and the number of employees the organization needed to support. This meant that as a company made projections for headcount growth, the amount of space required to support future workplace needs also expanded.
If a company had 10,000 employees, each would be assigned to specific desks or cubicles under the guidance of a specific employee-to-seat ratio, often 1:1. In order to understand the usage of these locations, real estate leaders would partner with their workplace teams, who were gathering data based on a few sources. First and foremost, they’d rely on badge data which provided a reasonable measurement of attendance.
Next, workplace teams would do manual observations by walking through spaces to manually note which spaces were occupied and which were not. By combining these two sources, real estate leaders would generally have enough information to make an informed decision.
This exercise would repeat and projected headcount growth would be brought into the equation. To plan for the new year, workplace and real estate leaders would determine if their current portfolio was correctly sized and located, or if it was time to expand or retract. For example, if they planned to grow by 15% by next year and the assumed amount of occupancy was at the limit, this would mean that the company would have to invest in more space to accommodate a 15% increase in capacity.
This all worked for one reason, and one reason only: occupancy was consistent, reliable, and stable.
The equation changed when occupancy became inconsistent.
Now let’s assume that for that same company with 10,000 employees, only 50% come into an office on a regular basis.
That would mean that the real estate footprint needs to accommodate 5,000 employees, but today their portfolio is set up to accommodate at least 10,000. In this scenario, which is becoming extremely common, the business is thinking about expanding its portfolio size, even with aggressive headcount expansion goals.
Now, factor into the equation that the 5,000 employees who come into the office regularly might come in on different days, in different locations, with different job functions, and different office requirements.
How can we expect that the old ways of doing things, when occupancy was consistent, will continue to work?
Badge data is just fine for measuring attendance. But on average, 20% of people will never physically badge in and the majority of companies do not require badging out. This means that you have an incredibly large margin for error if you rely on attendance data.
What about manual observations? Well, they’re certainly accurate but there are two major drawbacks. First, they only measure data at a point in time. This means that as employees dynamically change patterns of space usage and attendance, the data gets stale fast. Second, it’s inherently unscalable.
And what about WiFi location tracking? Well, it’s is not built for measuring occupancy, it’s built for tracking devices. This means that when someone comes into the office with a cell phone and a laptop, they’re often double counted. Depending on the strength and location of access points, there are times they aren’t counted at all.
The old ways just don’t work and you’re left with these questions:
- Can my organization continue to bear the cost of not knowing which spaces we need and which we should keep?
- What happens if I keep more space than I actually need?
- What happens if I close down an office that my team actually needs?
The new way to right-size your portfolio
In a world where occupancy is inconsistent, you need more than just assumptions. You need occupancy intelligence.
Occupancy intelligence is how real estate teams gain a true understanding of how and when their offices are actually used so they don’t have to compromise between reducing cost and improving employee experience in a world where occupancy is increasingly dynamic.
You may be feeling pressure to reduce space and control costs, all while needing to create an incredible employee experience for your team, yet you lack the framework, hard data, and technology to guide these big decisions. So, what should you do?
Step 1: Capture the activity across your portfolio
First, you need a clear and accurate understanding of people count, which is, simply put, the number of people occupying a space over a certain period of time. Once you understand how many people are occupying your buildings and floors on a day-to-day basis, you can better understand how much space you actually need and ensure your portfolio is properly sized, located, and ready to support future workplace needs.
It is critical that your people count number is accurate and always up to date. It serves as the basis of every insight you’ll need to understand and is the foundation of the fact-based recommendations you’ll need to make to leadership about the size and location of your portfolio.
Once you’ve accurately captured people count, then you are able to dig into the data and begin looking for trends and insights that will lead you to a conclusion.
Step 2: Analyze the data you’ve captured
Once you develop an understanding of your people count across your portfolio, dig deeper with the following questions. They will help guide your next steps.
- Which buildings have the highest occupancy in a given month? Why?
- Are there any obvious assets in our portfolio that are clearly underutilized?
- Are there any assets that are already at capacity?
- How does my average occupancy compare to peak usage?
- What may be causing occupancy to peak?
- What floors are frequented the most?
- Are there any noticeable trends across the space type on those floors?
- Are there any instances of several assets in a nearby area that can be combined?
- How does the capacity of my buildings compare to their actual occupancy?
Finding the answers to these questions is critical. The answers to these questions serve as the facts you’ll need to build a recommendation for leadership to either add space or remove space from your portfolio.
Leverage occupancy intelligence to right-size your portfolio
When it comes to your workplace, you deserve the best. VergeSense is the company behind the world’s first and only Occupancy Intelligence Platform that helps you gain a true understanding of how your spaces are actually used, so you don't have to compromise between reducing cost and improving employee experience.
With the Occupancy Intelligence for Portfolio Optimization solution, real estate leaders can reduce costs by correctly sizing where they need more office space and where they need less. Capture people count across your portfolio, and leverage AI to generate insights around total occupancy, people count distribution, percentage of time across the portfolio, and occupancy by day of the week. It’s portfolio right-sizing based on hard data.
Unlike WiFi and Badge data, which double-count devices and only measure attendance data, computer vision captures actual human behavior so you can trust that you’re making decisions on sound data. The Vergesense Occupancy Intelligence for Portfolio Optimization solution is 2x more accurate than WiFi data at the same price.
VergeSense captures people count with 95% accuracy, so you will have data you can rely on from proven technology that is hardened and future-proofed. VergeSense sensors are also outfitted with the industry’s strongest computer vision that accurately identifies the shapes and coordinates of human beings entering and exiting spaces.
With VergeSense AI, you gain a true understanding of how your spaces are actually being used by evaluating your data and generating contextual insights. This means that you can reduce the amount of time spent trying to make sense of data and spend more time using actionable insights to optimize your workplace for cost savings and improved employee experience.
VergeSense AI is an artificial intelligence engine that analyzes the data captured from our capture layer and third-party sources to generate actionable insights through a cloud-based application and developer tool kit. VergeSense AI helps you find the truth within your data of how your portfolio is actually being used.
Want to know more about the VergeSense Occupancy Intelligence Platform? Connect with a specialist