With real estate costs steadily rising, efficient use of space across the real estate portfolio is more important than ever. If we look at the average office as an example, 40 percent of available office space is under-utilized or not used at all on a typical work day(1). The cost associated with this represents a significant chunk of value that is going to waste on a daily basis.
The first step is to understand how space is utilized across your portfolio. Armed with this information, you can identify where opportunities to more efficiently use space exist. To gain this insight, consider these seven tips:
Take a closer look at space requirements. Is the space you’re paying for really needed? It may be that you don’t really need 10 floors and could consolidate or sublease three of them. Or, if you have multiple offices in one city, perhaps you could dispose of one alongside a lease termination clause. Asking these questions can help uncover ways to make better use of space or cut costs for savings you can then put into other investments.
Understand the average levels of utilization by location, department, team and cost code. Combining utilization data with location or department data will help uncover underlying working patterns of teams or locations. As the nature of work will vary between groups, levels of utilization may help you understand how conducive to flexible working these teams could be. For example, perhaps team members in the sales department could with a higher sharing ratio of 20 people to 15 desks, compared to the accounting team working at 15 people to 10 desks, as the sales team has lower levels of utilization because they frequently attend offsite meetings.
Track peak levels of utilization. In addition to the average, it’s also important to understand the peak levels of space usage. As an example, at its peak, a modern office will need to accommodate space for all employees. In situations where people cannot quickly find a free space, productivity suffers. Awareness of when peaks in demand occur will help you provide the right tools and resources for staff to find space quickly and easily.
Better allocate space. Increasing the person to desk sharing ratio increases the value derived from the workspace. If you have 100 seats allocated to 100 people, your maximum capacity is set. However, if you can increase the sharing ratio to 1:2 or 1:4, you can accommodate 120 or 140 people as your flex capacity. This is a very direct way to quantify the value of flexible working. For example, what would it cost to acquire 40 additional seats through other means, such as taking on additional space? Increasing the flex capacity where appropriate will help capture value. When space utilization data is combined with baseline statistics such as sharing ratios, you can easily make correlations around current allocations.
Make design adjustments to improve utilization. Viewing space usage as a heat map can help you identify the factors influencing utilization. By visualizing utilization data alongside other contextual information, such as occupants for each work zone and work patterns, you can identify trends and outliers that warrant further investigation.
Know where space is being underutilized. A reverse of a heat map will show “cool corners,” or areas of space that are performing poorly, that can be repurposed for more efficient use. If you identify pockets of underutilization, you can dig deeper into questions like, “Do environmental challenges, such as being too noisy, too cold or too open for focused work, exist in those pockets of underutilization?”
Evaluate the mix of space. For example, do you have the right mix of meeting rooms and collaboration spaces? Working with clients in room reservations for over a decade, I can say with confidence that there are never enough meeting rooms. The most heavily utilized meeting rooms can be found in legal services firms, which are often over 80 percent utilized and host as many as eight meetings per day. However, another trend can be seen looking deeper into this high level of room utilization. Trimble recently undertook a study to review utilization of the seats within those rooms and found that typically only 43 percent of the seats were being used during the meetings. Looking deeper, and the most common type of meeting was between 2-4 people. However, the most common meeting room had 8-10 seats. Right sizing the meeting rooms can present a huge opportunity to not only improve space utilization, but also employee satisfaction, productivity and collaboration.
Due to the number of factors that influence the use of any space, maximizing efficiency across your real estate portfolio means you must look beyond the pure utilization percentage and take a lateral view, uncovering causes and trends by examining underlying data.
Usage trends are impacted by environmental factors, working styles and culture, and staff openness to mobility. With the advancement of technology that can capture, track and analyze utilization it’s possible to maximize your real estate investment and more efficiently utilize space today.
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