Hybrid work is here to stay. According to CBRE's 2024 Office Trends report, 92% of clients surveyed have adopted a hybrid work model, prompting widespread reassessment of office footprints and space.
So, what does this mean for offices?
This shift has redefined the role of office space. No longer just a place to work, offices are now strategic assets—or costly liabilities—depending on how effectively they are optimized and managed. The race for smarter, more efficient, and more desirable workplaces is on, and companies that lack the right insights and tools risk falling behind.
Hybrid work, shifting employee preferences, and rising costs have left many companies with underutilized office space. But simply cutting square footage isn’t enough. To right-size portfolios and transform unused areas into valuable assets, companies need more than guesswork—they need actionable data, a clear strategy, and modern smart building technology to tie it all together.
The Office Space Paradox: High Vacancies Amid Surging Demand for Grade A Offices
It’s a strange time for the office market—a paradox where overall vacancy rates remain high, yet demand for modern, high-quality Grade A space continues to climb. For example, in London, demand for Grade A office space in 2024 exceeded pre-pandemic levels by 4% (Source: Cushman & Wakefield 2024 Report).
As a result, many companies are consolidating into premium offices that better support employee experience, flexible work models, and sustainability goals.
For example, post-pandemic recovery trends show:
Net absorption rates flip positive for the first time since the pandemic began, indicating a good balance between available space being leased and vacated. Source: JLL U.S. Office Market Dynamics Report (2024, Q4)
Increased tenant searches in the U.S. with more companies re-evaluating their space requirements.
Growing demand for large-scale office space in Europe and APAC as companies seek future-proof offices that attract employees back to the workplace.
The message is clear: it’s not about having more space, but the right space. And that requires smarter space use and management. However, organizations aiming to downsize their offices need to be aware of the potential risks that arise when decisions are made without accurate utilization data.
The Pitfalls of Office Downsizing
Many companies are downsizing office space, but without data to guide their decisions, they risk costly mistakes—cutting too much or holding onto space they no longer need.
Common pitfalls include:
Inaccurate metrics of space utilization: Decisions are based on outdated badge swipe data or gut feel, not actual usage patterns.
Lack of strategic planning: Downsizing is treated as a cost-cutting exercise, not a chance to rethink how the space supports employee needs and company goals.
Without clear visibility into how spaces are used, companies struggle to optimize their office space based on actual utilization.
From Guesswork to Data-Driven Decisions: Measuring Office Utilization
Once companies recognize the need to optimize office space, the next challenge becomes clear—how do they actually measure space utilization?
Fortunately, companies have several options for gathering occupancy and utilization data, each with its own pros, cons, and level of accuracy:
Manual Reports: The lowest-cost option, but also the least reliable. These rely on staff observations and manual logging, making them prone to errors, omissions, and bias.
Existing Booking and Access Control Data: These systems provide a helpful baseline using infrastructure already in place, but they miss important real-world behaviors—like no-shows, impromptu meetings, and informal use of open areas.
Occupancy Sensors: The gold standard for accuracy, sensors deliver real-time data on actual presence, movement, and usage patterns. They provide the most granular insights but require upfront investment in hardware and installation.
Together, these options create a spectrum of data-gathering approaches, allowing companies to tailor their strategy based on budget, building type, and business goals.
The good news is that most organizations don’t need to invest heavily in sensors to start optimizing their office space. Many already have access to valuable data streams, including:
Room and desk booking systems
Access control systems
Wi-Fi tracking
This is where smart building platforms become essential. By connecting to and blending these existing data sources with sensor data (where available), companies can build a complete, actionable picture of how space is really being used.
These smart building platforms or Integrated Workplace Management Software (IWMS) maximize value by:
Comparing bookings to actual usage to spot ghost meetings and unused space
Aggregating data across systems and flagging calibration or sensor issues
Rolling up data into clear views—by space type, time of day or week, and even regional or global office comparisons ("office league tables")
Providing detailed analysis by workspace type (desks, meeting rooms, amenity spaces), floor, and department
Generating heatmaps and utilization trends over time to inform long-term planning and redesign
Coupling building control strategies with actual occupancy and usage patterns.
The best space optimization strategies balance cost, complexity, and accuracy. Fortunately, smart building platforms help companies strike that balance by unlocking the value of existing data and giving them the flexibility to add more granular sensor data where and when it matters most.
Smart Building Software Makes Data Actionable
Collecting data is only part of the equation—the real value comes from turning that data into clear, informed decisions. This is where smart building software shines. With advanced analytics and IoT-driven intelligence, platforms like GENESIS for building operations and IBSS for workplace management transform raw data into:
Real-time usage dashboards for workplace teams
Automated alerts when spaces are under or over-utilized
Predictive insights to guide future space planning and renovation projects
Armed with this data-powered decision-making, companies can confidently downsize (or right-size) their office footprint—without compromising productivity, employee experience, or sustainability targets.
Repurposing Space for Maximum Value
Additionally, with accurate utilization data in hand, companies can transform unused areas into valuable assets, such as:
Collaboration zones tailored for hybrid teams
Wellness areas that support employee well-being
Flexible spaces that can be subleased to third parties or used dynamically
When spaces are actively reimagined and managed well, they stop being financial drains and start driving strategic value. Let’s see what this looks like.
What’s the ROI of Space Optimization?
Smart space optimization offers far more than cost-cutting—it unlocks long-term financial, operational, and sustainability benefits. According to research from Arcadis, smart building technology can deliver:
Lease Cost Savings: Space optimization can reduce requirements by over 30%, cutting lease expenses significantly.
Strategic Allocation: By understanding how different departments use space, companies can move beyond outdated 1:1 desk ratios and adopt flexible, activity-based work environments.
Data-driven Renovations: Unpopular or underused spaces can be repurposed based on real data, ensuring renovation investments create spaces employees actually want to use.
Enhanced Employee Experience: Smart, well-utilized offices that reflect how people work today help companies create spaces that “earn the commute.”
Reduced Food Waste: Real-time occupancy data helps facilities teams right-size catering services, avoiding unnecessary waste.
Optimized Cleaning Schedules: Cleaning teams focus on high-traffic areas, improving efficiency and reducing costs.
Operational Savings: Companies can close off entire floors on low-occupancy days (like Mondays and Fridays), slashing HVAC, lighting, and cleaning costs.
By transforming unused space into high-performing assets and aligning real estate decisions with actual workplace needs, companies can future-proof their portfolios and create work environments that actively support business growth and evolving employee expectations.
Future-Proofing Real Estate with Smart Technology
Smart building software doesn’t just optimize space — it equips companies to continuously adapt their real estate strategies as work patterns, employee expectations, and sustainability priorities evolve. With the right tools, companies can:
Make confident real estate decisions
Align space with employee needs and company culture
Adapt to future workplace shifts with agility
Achieve sustainability and ESG goals through smarter energy and resource management
Together, these capabilities transform office space from a static overhead expense into a flexible, future-ready asset that actively supports business success.
Ready to Turn Your Empty Offices into Productive Assets?
Our smart building platforms help you understand how your spaces are actually used—so you can right-size with confidence, adapt to employee needs, and uncover new opportunities to save costs and improve experiences.
See what’s possible with our smart building solutions: https://iconics.com/en-us/Industries/Smart-Buildings
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