Reimagine your office at a pivotal moment and save money with space utilization
If you signed a lease in 2019 for five years and you’re looking at renewal, congratulations! You’ve survived a period of unprecedented change, which is no small feat as a business. Your lease is also up next year.
Do you need to save money to get you through the next lease? You’re not alone.
If you haven’t thought about renewing your corporate lease, which for many companies is one of their top line items, it might be a good time to. It’s a great time to assess how your teams are using the office in 2023, and how they might be using it in 2025 and beyond as your lease comes up.
There are a lot of predictions about what the next round of lease renewals may look like for many organizations. A new report from Colliers Canada predicts the national office vacancy rate could peak at approximately 15 per cent by the end of 2024 as the rise of hybrid work models prompt companies to reduce their office space.
But for companies looking at reducing or shifting their real estate footprints at lease renewal, there are still more questions than answers.
Time to re-lease or release the office?
The Center for Economic Policy Research’s (CEPR) research says that:
“Office leasing quantities have fallen substantially, from 253 million square feet of new leases signed annually in 2019, to just 59 million in May 2022. Since more long-term leases expired than new leases were signed, office vacancy rates have risen, often to multi-decade highs. Rents on newly signed leases declined substantially in real terms across the country at the onset of the pandemic and remain depressed in cities like New York. Total leasing revenue on all in-force leases has fallen by 17.5% in real terms nationwide.”
Despite the return to office push from many big corporations, things are changing in the commercial real estate world, as a result of hybrid work shifting the very nature of the office.
Andrew Lawson, Founder of Workspace Solutions, notes that his commercial real estate clients are straddling a tough line when it comes to lease renewals:
“I empathize with business leaders because these are not easy decisions. The whole world has changed. And now a lease renewal has you trying to predict the future? Before COVID, it was easy to predict what your company’s real estate needs might be over the term of a lease. But now, you could be a growing company that is shrinking your real estate portfolio due to remote work. Or you could be a shrinking company growing its portfolio to build showcase spaces for prospective client meetings. It’s a very tough position to be in for a business leader.”
You need data to make decisions around your lease renewal
With all change comes opportunity. The shift in how work is done could help your organization save money. But you need data.
Having a lease end is a great opportunity to revisit your space, and not necessarily shrink your footprint, but to consider the way it’s being used now, and how those spaces function with those uses. Maybe you’re growing, and in past times, you might have considered a move for that reason, but now, you could stay where you are and restack, or come up with a new configuration that helps you maximize your current real estate spend while you grow as an organization.
Exciting, right? Not so fast. You need data.
Andrew Lawson says that employers have very different questions about their real estate usage than they did pre-pandemic:
“Now we're thinking about how are people going to use this space, how do our hybrid teams use it? How do specific functions use it, like the sales team, obviously, is going to act differently? Then your legal teams? How often is the sales force in the office? Is a dedicated sales floor not the best use of space? Are they going to use that type of resource versus the legal team? I think now we're really starting to think about that. And that's not just going to be done with a hunch or occupancy data.”
You need more than people counting. You need rich, robust data to make decisions that will serve your company through your next lease. Maybe the one after that too.
Data costs money. We’re trying to reduce costs overall, hence the lease debate
Gone are the days of looking around the office and matching people to workstations to make decisions around your space needs. Gone are the days of head counting because people are using offices differently than they did the last time you considered your space needs. They’re coming in to collaborate, to rejuvenate, to meet with their managers, but you need data to get a fulsome picture to ensure your office rises to meet their needs today.
You’ve come through a period of global change with very little information about the future, and there’s never been a better time to lean into the availability of best in class data when you make decisions about your space.
How InnerSpace’s space utilization platform has helped companies rethink their spaces and save money, while improving office function
Investing in best-in-class data will save you money, increase productivity and give you the information you need to create an office that truly works for your teams, and makes their time in the office valuable for everyone.
We love data, and we love sharing data that can help your office work better, and most importantly work for you, where you are in 2023. Maybe you’re growing. Maybe you’ve moved to a hybrid environment and the office seems discombobulated. There are savings to be found, and productivity gains to be made, in the midst of so much change, and the data is just waiting to be uncovered to help you make the changes you need.
Want to know more about how space utilization can save you money at lease renewal?
You can check out two case studies, one that saved a client $1.2 million annually and bolstered productivity, and another that saved a client over $2 million dollars annually with a restack and helped them meet their sustainability goals. Recently, with insights from our data, another client saved a million annually in operating expenses, reduced their carbon footprint, and had a productivity gain that equated to around two million dollars.
Both clients gained deep insights into how teams were using their space, and used that decision to make changes to their real estate portfolios that supported their business and teams.
Ready to talk return on investment? We’d love to show you what we can do for your bottom line
We’ve created an ROI calculator to help you begin to imagine what you can do with our superior insights. You can find it by click the button below.
