Reducing real estate footprint is one of the highest value workplace transformation opportunities available to many organisations today.
However, footprint reduction is often approached using incomplete information, resulting in overcrowding, employee dissatisfaction, underperforming workplaces and costly redesign projects.
This guide outlines a structured approach to designing future workplaces using the Measure, Model, Transform (MMT) framework.
Measure provides the evidence needed to understand how today’s workplace is actually being used.
The model, powered by Tessellate, enables organisations to evaluate alternative workplace strategies before making costly investment decisions.
Transform then delivers the preferred workplace design with greater confidence, lower risk and measurable outcomes.
Key questions
Before making significant real estate decisions, consider:
- How much space do we actually need?
- Where is our underutilised space?
- What risks exist if we reduce our real estate footprint?
- Which scenarios should we evaluate before making changes?
The remainder of this guide explores how organisations can answer these questions using behavioural evidence and scenario modelling.
Why organisations reduce footprint
Common drivers include:
- Lease expiry
- Cost reduction targets
- Hybrid working adoption
- Portfolio consolidation
- ESG commitments
- Organisational restructuring
While reducing footprint can unlock significant financial and environmental benefits, successful outcomes depend on understanding both workplace demand and workplace behaviour.
Over the past decade, we have analysed billions of workplace data points across a wide range of industries and geographies. While every organisation is different, a consistent pattern has emerged.
Average workplace utilisation typically ranges between 30% and 40%. However, these averages often conceal significant variation throughout the week.
Many organisations experience what we describe as a “midweek mountain”, where attendance peaks on Tuesday, Wednesday and Thursday. During these periods, utilisation may exceed 70-80%, while Mondays and Fridays remain significantly underutilised.
This creates a common workplace paradox. Organisations often have sufficient space overall but experience capacity pressures during peak periods. As a result, perceived space shortages frequently coexist alongside opportunities for footprint reduction.
Successful footprint strategies require organisations to understand both average and peak demand before making decisions about consolidation, workplace redesign or future capacity.
Example: understanding the value of space
A workplace may appear to have excess capacity. However, the real question is not:
- How much space do we have?
but:
- How much space are we paying for?
A 10,000 sq ft floor operating below capacity may represent:
- Real estate cost
- Cleaning cost
- Energy consumption
- Maintenance cost
- Security cost
Understanding these costs alongside utilisation data helps organisations evaluate opportunities more effectively.
Common mistakes
Reducing real estate footprint is often approached as a cost saving exercise.
However, the most successful estate optimisation programmes are driven by behavioural evidence rather than assumptions or financial targets alone.
Mistake 1
Reducing footprint before understanding peak demand.
Mistake 2
Relying solely on surveys.
Mistake 3
Treating booking data as reality.
Mistake 4
Assuming current attendance behaviour cannot change.
The hidden cost of excess space
Real estate costs extend beyond rent. Additional costs often include:
- Cleaning
- Security
- Energy
- Catering
- Maintenance
- Facilities management
- Capital expenditure
Underutilised space continues to consume resources regardless of whether employees use it.
The challenge is determining how much space is genuinely required without introducing new operational risks.
Why utilisation alone is not enough
Real estate decisions are often based on utilisation figures. However, average utilisation alone rarely provides enough evidence to determine how much space an organisation actually needs.
A workplace operating at 40% average utilisation may still experience periods of significant demand. Understanding both average and peak utilisation is critical.
Example:
- Average utilisation: 40%
- Peak utilisation: 82%
While average utilisation suggests excess capacity, peak demand may indicate a different challenge.
Data required before making decisions
Organisations should seek to understand:
Occupancy
- Average utilisation
- Peak utilisation
- Attendance patterns
Workplace behaviour
- Department usage
- Floor performance
- Neighbourhood performance
Meeting rooms
- Demand patterns
- No show rates
- Occupied vs booked
Space efficiency
- Sq ft allocation
- Cost per occupied seat
- Cost per occupied sq ft
Scenarios to explore
Reducing real estate footprint is one of the most significant investment decisions an organisation will make.
Before consolidating floors, exiting leases or redesigning workplaces, leaders need confidence that today’s decisions will continue to perform as workplace demand evolves.
This is where Tessellate becomes central to the Model stage of the Measure. Model. Transform framework. Rather than relying on historic utilisation alone, Tessellate enables organisations to evaluate multiple future scenarios before committing capital or reducing their estate.
Questions include:
Floor consolidation
- What happens if one floor is removed?
- Which floor creates the lowest operational risk?
Desk sharing
- What person to desk ratio can be supported?
- What happens at 3:1?
- What happens at 4:1?
Attendance management
- How can peak demand be reduced?
- Which teams contribute most to capacity pressure?
Workplace redesign
- What workplace mix would support a smaller footprint?
- What spaces should be expanded?
- What spaces should be reduced?
What workplace mix would support a smaller footprint?
Consolidating personnel into fewer floors or buildings represents a high value optimisation strategy. In one instance, a healthcare organisation sought to shutter an administrative floor to establish a collaborative hub, addressing over 60 private offices that remained largely underutilised. While the potential for consolidation was evident, the primary challenge lay in predicting the operational impact on the remaining workplace infrastructure.
Critical uncertainties often arise regarding desk requirements, meeting room availability, and the ideal balance of focus versus social zones. By leveraging occupancy sensor data and varied workplace datasets, Tessellate simulates future demand and models the effects of relocations or floor closures before capital is committed. This approach generates recommendations for an optimal workplace mix, maintaining a target 50-60% average utilisation while ensuring peaks do not breach thresholds that degrade employee experience.
What spaces should be expanded? What spaces should be reduced?
Lease expirations or major redesigns often trigger a re-evaluation of space. Traditional headcount based planning frequently fails in hybrid environments where average occupancy hovers around 30-40% while peak demand creates significant midweek pressure. These uneven patterns make it difficult to determine the correct equilibrium of workstations, amenities and collaborative areas.
Tessellate enables organisations to architect future environments based on empirical usage rather than static assumptions. By integrating historical data with growth projections and attendance policies, stakeholders can evaluate diverse configurations to understand their long-term viability and performance.
For high stakes projects, such as a $60 million development of a new office building, the cost of miscalculating the workplace mix is substantial. The resulting environment must navigate current behaviours while remaining resilient to future shifts in demand. Tessellate allows for the testing of multiple scenarios prior to investment, ensuring that real estate portfolios remain efficient, flexible, and aligned with actual workplace behaviour.
Evaluating trade offs
Every real estate decision involves trade offs. The objective is to create a portfolio that balances operational efficiency, employee experience and long-term business performance.
Successful workplace projects evaluate multiple scenarios before selecting the strategy that delivers the best overall outcome.
Typical evaluation criteria include:
- Cost savings
- Peak utilisation
- Employee experience
- Carbon impact
- Operational risk
- Workplace flexibility
Example transformation journey
A prominent medical research institution sought to resolve a multifaceted workplace challenge. Their expansive portfolio, encompassing over 5,000 distinct areas – from clinical and research zones to administrative hubs – was suspected of harbouring deep underutilisation. However, leadership lacked the empirical evidence required to secure the necessary capital for portfolio improvements.
The organisation launched a progressive 3 year analytics initiative using occupancy sensors. By adopting a rolling strategy, they instrumented specific departments for several months at a time. This iterative approach allowed them to capture granular workplace behaviour across the entire portfolio while maintaining operational and budgetary efficiency.
The resulting data confirmed that demand patterns fluctuated wildly between departments, reinforcing the risk of making decisions based on static assumptions. These studies identified clear opportunities for immediate consolidation and provided the strategic foundation for larger scale workplace transformation.
The program proved so valuable that it was formalised into policy; departments are now required to complete an occupancy study before any funding for space modification is granted. Empirical insights have become the mandatory baseline for all future planning and investment.
This evidence based approach enabled several high impact initiatives, including:
- Reclaiming underused administrative floors to create high value collaborative hubs for clinicians and scientists.
- Converting traditional private offices into flexible environments that align with actual workplace demand.
- Relocating personnel from underperforming buildings to existing facilities, allowing for the strategic exit of leases.
- Developing a long term strategy for a new clinical facility, designed to support future growth and research expansion.
By leveraging workplace analytics, the organisation transitioned from intuition to evidence based decision making.
This shift has unlocked immediate financial benefits while ensuring the long-term resilience and efficiency of their real estate portfolio.
Current workplace
↓
Measure
Observe workplace behaviour
↓
Model
Evaluate alternative scenarios
↓
Transform
Implement chosen strategy
↓
Validate
Monitor outcomes
Questions every Executive should be able to answer
Before making significant real estate decisions, every executive team should be able to answer the following questions with confidence.
- How much space do we actually need?
- Which areas are underutilised?
- What is our cost per occupied square foot?
- What risks exist if we reduce footprint?
- What workplace behaviours create peak demand?
- Which scenarios should we evaluate before making changes?
Ready to explore your options?
Whether your objective is reducing operating costs, consolidating office space, planning a lease renewal or designing a future workplace, MMT provides a structured, evidence based approach to workplace transformation.
Use the MMT Scenario Builder to generate personalised workplace transformation scenarios based on your organisation’s objectives, constraints and workplace data.
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