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How Data Can Help with Your Next Lease Expiration Decision

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As employees continue to make their way back into the office, organizations across the country with office leases that are expiring soon are asking themselves the same question: “how much office space do we really need?” While the answer to this question was relatively straightforward a few years ago, that is no longer the case.

Before organizations can determine how much space is needed, they must first uncover how the current space is actually being used. Sure employees come to the office to work, but where and how they prefer to work while in the office can have profound implications for future office leasing decisions.

Finding an answer to the space utilization puzzle requires objective data, and gathering data robust enough to make such an important decision is only possible by understanding the best way to conduct qualitative and quantitative research about office utilization.

Today’s Methods Are Outdated

Even today, the real estate decision-making process can be very rudimentary. For many organizations, estimating the amount of space they need is usually determined by a generic “square footage per employee” number. But this metric doesn’t accurately represent the nuances of the company’s needs. When employees are given the opportunity to provide their feedback, it is typically gathered through simple surveys that ask basic questions like “what part of town would you like to locate in?” And “how many times per week do you use the conference room?” While these methods are better than nothing, there’s significant room for improvement.

Interest in improving the office space evaluation process was already increasing prior to the COVID-19 pandemic but started to gain significant ground once the impacts of the pandemic began to be felt. The harder it became to bring employees back to the office, the more importance was placed on the office itself. 

In a recent interview Kay Sargent, Director of WorkPlace at HOK, explained that a large part of the increased interest in optimizing office space is due to this increased need to focus on employees. “Today there is a renewed focus on the fact that the most valuable asset in any space is the people. After all, people are the reason we create space in the first place,” Sargent said. “We need to design spaces that reflect our humanity and ensure social equity and inclusion. By creating environments that support wellbeing, engagement and inspire those within them, we can drive powerful outcomes.”

So, how can organizations modernize their real estate decision-making process and ensure that they are creating the right type of environment for their employees? 

The key is data.

You Can’t Improve What You Don’t Measure

The first step in making a smarter office space decision is understanding how the existing office is being utilized. Knowing how many times an employee swipes their key card or how many employees use the patio on their lunch break is useful information, but it falls short of providing the best, most useful insights about how the office is being used.  

To truly understand how office space is being utilized, organizations are turning their attention toward advanced space utilization studies. These studies use passive infrared (PIR) sensor technology to accurately monitor usage data across the entire office environment. PIR sensors are battery operated, non-invasive, motion-activated data collectors that can easily be placed throughout the office. The sensors can monitor common areas (hallways, conference rooms) or specific areas (desks, private offices) and determine how frequently those areas are used based on the motion detected in them.

Once installed, employees can simply use the office as they normally would as the sensors passively collect usage data. The real-time, accurate data these sensors provide arm organizations with the information they need to make educated, thoughtful decisions about their future space needs.

Allison Ballard, Vice President and Executive Director at 4SITE, believes space utilization studies can uncover hidden insights that would not be possible any other way. “One of the most valuable pieces of insight we can gain by conducting a space utilization study using these sensors is dwell time,” Ballard said. “It’s great if someone books a conference room for the day, but if they are only using it for a short period of time, then that is an inefficient data set when making a decision about increasing the number of shared spaces. These studies give us insight into how the office is actually being used, not just how we think it’s being used.”

Implementing such a powerful tool probably isn’t as complicated as you might think either. The technology is simple enough for smaller organizations to get it up and running on their own, and robust enough for larger organizations to roll out comprehensive studies spanning departments, floors, or locations. 

Studies using PIR sensors also minimize privacy and data security risks for employees due to the anonymous nature of the data mixed with the ability to store information on the cloud and integrate via API. This takes the work of data collection out of human hands and allows organizations to focus solely on the stories that the data tells. If an organization truly wants to go beyond guesswork and make educated, data-driven decisions about its real estate needs, a space utilization study is the best way to get there.

Turning Data Into Leasing Decisions

Once the study is complete and the data has been analyzed, an organization should be well equipped to make a decision about its office space needs. But what do those insights actually look like, and how can the data be translated into a decision? Here are a few examples.

Let’s say an organization’s office lease is expiring soon and the leadership team wants to explore different options. To better understand how their employees use the office, they’ve conducted a space utilization study and have the data in hand. To their surprise, the data suggest that most employees don’t actually spend all that much time at their desks. In fact, their hybrid work schedule means not every employee is in the office every day, and those that are tend to congregate in the common areas to work.

Based on this data alone, the organization can easily conclude that they may not need to lease as much space as they originally anticipated. Although their number of employees might be growing, the actual usage of their existing space indicates that a smaller space is sufficient and common areas should be given priority over individual desks.

But that information alone might be misleading. If the data reveals that a number of teams frequently need to meet in larger, collaborative groups, a larger space may be required to accommodate those meetings. It may also be found that group work is dynamic and teams frequently jump around the office to collaborate, in which case a larger communal/lounge area might be necessary.

Suppose the study data also reveals that the conference rooms are being used, but only by a small number of people at once. In this case, future space plans should likely include more huddle rooms as opposed to large conference rooms to best support how employees are utilizing the space to get work done. With the right analysis, you can even learn nuanced insights about how people use space, like when certain hallways get crowded or the best place to put the printer.

The list of examples is endless, but the overall idea remains the same. The data provided by space utilization studies can save organizations money, increase employee happiness and optimize how the office is being used. Without this data, organizations are simply making educated guesses about serious financial decisions.

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