Real estate is one of the largest expenses for most organizations, yet workplace decisions are often based on simple measures like headcount, capacity, or assigned seats.
Space Economics takes a different approach.
As one of the four pillars of the InnerSpace Building Performance Index, Space Economics evaluates whether an organization's real estate footprint, and the cost of that footprint, is aligned with actual workplace demand.
The pillar represents 25 points of the overall score and is built from two related metrics:
Together, they help answer two fundamental questions:
Average Square Feet per Person
Average Square Feet per Person measures how much workplace space is available for each active user.
Unlike traditional square-feet-per-employee calculations that rely on headcount or capacity, this metric focuses on actual workplace demand. A low value may indicate that the workplace is too dense, while a high value may suggest excess space. The goal is balance: enough space to support employees effectively without carrying unnecessary square footage.
Importantly, organizations can define what space is included in the calculation. The analysis can be performed across an entire building or limited to specific categories of space, allowing leaders to evaluate the square footage that is most relevant to their workplace strategy.
Cost per Person adds the financial dimension.
It measures how much workplace space costs relative to the number of people actively using it. This helps organizations understand whether real estate spending is aligned with actual demand. For example, two buildings may have the same capacity, but if one consistently supports fewer occupants, its cost per active user will be significantly higher.
Like Average Square Feet per Person, Cost per Person can be calculated using the same customized scope of space being analyzed, creating a direct connection between the spaces being measured and the costs associated with them.
Together, these metrics provide a more complete picture than either one alone.
One of the strengths of Space Economics is its flexibility. Organizations are not limited to measuring the entire building. They can choose exactly how much square footage they want included in the analysis based on the questions they are trying to answer.
For example, they may evaluate:
This allows leaders to answer more targeted questions:
By focusing on the spaces that matter most, organizations can uncover opportunities that may be hidden in building-wide averages.
The same flexibility applies to cost analysis.
Because organizations can customize the square footage included in the analysis, they can also evaluate the cost associated with those specific spaces. This allows Space Economics to move beyond broad building-level averages and provide a more targeted understanding of workplace economics.
InnerSpace can estimate annual cost per square foot using city-level benchmarks informed by sources such as CBRE and JLL. These estimates can include:
Organizations can also provide their own cost-per-square-foot assumptions to create a more tailored analysis. This is important because the economics of office space vary dramatically between markets. A workplace in New York, London, or Singapore operates under very different cost conditions than one in a smaller market.
There is no universal standard for how much office space each person should have. Workplace norms vary across regions, influenced by local real estate markets, office design standards, and employee expectations.
To account for these differences, Space Economics uses regional benchmarks informed by market research across:
This ensures that workplaces are evaluated against relevant market conditions rather than a single global standard.
A strong Space Economics score indicates that space and cost are well aligned with workplace demand. The organization is providing an appropriate amount of space while maintaining economic efficiency.
A lower score may indicate:
These insights help workplace and real estate leaders identify opportunities to optimize their footprint, rebalance space types, or improve cost efficiency.
Space Economics represents 25 points of the InnerSpace Building Performance Index because space and cost are inseparable. A workplace can appear efficient from a space perspective while carrying unnecessary cost. It can also appear cost-efficient while lacking the space employees need.
By combining Average Square Feet per Person and Cost per Person, Space Economics provides a balanced view of workplace performance. Just as importantly, it allows organizations to decide what square footage should be measured, whether that means an entire building, a floor, or specific room types, so the analysis reflects the spaces that matter most to their business.
The result is a more meaningful understanding of whether they have the right amount of the right space at the right cost.