For decades, companies approached real estate planning with a simple formula: headcount dictates square footage. More employees meant more space. Fewer employees meant downsizing. Real estate was seen as a necessary but static cost—a line item on a balance sheet, rather than a dynamic business asset.
Then everything changed.
Hybrid work is now the norm, and office attendance has settled at an average of 42% on any given day. That means that more than half of all office space is sitting empty at any given moment, collecting dust while the lease bills keep rolling in.
Yet many companies are still paying for space as if every desk is occupied five days a week.
This isn’t just a cost problem. It’s a business strategy problem. Companies that continue to treat office space as an inflexible, fixed expense are missing a major opportunity to optimize operations, reduce waste, and realign real estate strategy with actual business needs.
The Real Cost of Underutilized Office Space
Leaders often view office real estate as a necessary overhead cost, but few take the time to quantify how much money is lost on underutilized space.
Consider this:
- A company leasing 50,000 square feet at $50 per square foot is spending $2.5 million annually on office space.
- If only 40% of employees are in the office on any given day, then the actual cost of occupied space is over $125 per square foot—more than double the listed lease rate.
- And that’s before factoring in maintenance, utilities, office amenities, and operational costs.
The reality is that many companies are spending millions of dollars a year on space their employees don’t use. And the impact of that inefficiency goes far beyond just wasted money—it affects agility, employee experience, and long-term business performance.
In a world where every square foot carries a price tag, leaders need to start treating office space like they would any other major business investment: measuring impact, optimizing usage, and making data-driven decisions.
Why Companies Are Stuck in an Outdated Real Estate Model
If office utilization is so low, why haven’t more companies adapted?
The biggest challenge is inertia. The traditional model of fixed, long-term leases makes it difficult for companies to pivot. Many organizations are locked into office footprints that were designed for pre-pandemic work habits—and they’re struggling to adjust to a reality where fewer employees come in daily.
Beyond that, some companies are hesitant to rethink their office strategy because they fear losing the intangible benefits of in-person collaboration and culture-building. But there’s a false assumption baked into that mindset:
More space does not equal more collaboration.
In fact, keeping an oversized, underutilized office can have the opposite effect—creating disjointed work environments where employees feel disengaged, and where space doesn’t align with how work actually happens.
A Smarter Approach: Turning Real Estate into a Strategic Asset
Rather than simply shrinking office footprints, leading companies are taking a more holistic approach: rethinking how space is used, where it’s needed, and how it can drive business value.
This requires a shift in mindset. Instead of measuring office space by square footage, companies should measure it by business impact—how well it supports collaboration, productivity, and long-term success.
Here’s what that looks like:
1. Shift from Fixed to Flexible Models
- Instead of committing to rigid long-term leases, companies should explore more flexible options:
- Hybrid leasing models that mix core office space with on-demand flex space.
- Office hoteling instead of dedicated desks.
- Regional satellite offices instead of a massive central HQ.
- Companies that once needed 50,000 square feet may now thrive with 30,000 strategically designed square feet plus a mix of co-working spaces and remote work solutions.
2. Design for Engagement, Not Just Efficiency
The office should be a magnet, not a mandate. Instead of simply downsizing to cut costs, companies should focus on creating a workplace that employees actually want to come to.
- Collaboration-first design: Prioritize shared workspaces, team rooms, and brainstorming zones over rows of assigned desks.
- Experience-driven workplaces: Leverage design elements that boost creativity and well-being, like natural light, biophilic design, and ergonomic workspaces.
- Seamless hybrid collaboration: Meeting spaces should be tech-enabled to support seamless hybrid work, so that remote and in-office employees can collaborate effectively.
3. Use Data to Make Smarter Real Estate Decisions
Modern companies use data to drive every other major business decision—real estate should be no different.
- Occupancy analytics: Track actual office attendance patterns to understand when, where, and how employees are using space.
- Workplace experience surveys: Get direct feedback from employees about what’s working—and what’s not.
- Collaboration heat maps: Identify which areas of the office are actually driving productivity and engagement.
By leveraging real-time data, companies can ensure that every square foot is working as hard as their employees are.
The Future of Office Space: Adapt or Overpay
The companies that embrace real estate as a strategic tool will gain a competitive edge.
At Helm, we help companies navigate this transition with a data-driven approach.
Office real estate is no longer just a cost to manage—it’s an opportunity to optimize.
