Are the myths of space utilization costing you more than you know?

Abstract

Purpose

The purpose of this paper is to illustrate the importance for real estate organizations to measure portfolio space in a meaningful way, allowing occupancy planners to make aggressive recommendations to reduce under utilized space within a portfolio.

Design/methodology/approach

This paper takes the form of an office space characteristics study of nine global occupiers in four different industries, focusing on vacancy rate, density, space usage and gross versus rentable/usable square footage.

Findings

There is a disconnect between where many corporate real estate executives think they need to be on these measurements, where they think they are, and where they truly are when metrics are based on actuals, and not on targets. Also, most US occupiers are above the BOMA international density recommendation of 225 square feet per person. Per person and per seat space occupancy is lower in Europe and especially in Asia.

Practical implications

The paper contains suggestions on how and what portfolio spaces to measure, as well as a base for comparing major space characteristics to corporate peers. This information is valuable for helping a corporation “right size” its portfolio in occupancy planning, and provides a meaningful way for real estate executives to demonstrate support for overall corporate objectives such as cost efficiency.

Originality/value

This study is possibly the first ever published detailing such a large amount of office space (almost 42 million s.f. total). It provides corporate occupiers a framework for measuring their own portfolios, and a yardstick for comparison of space characteristics to others once that has been completed.

Citation

Knapp, C., Vickroy, K., De Bruyn, L. and Kwong, D. (2009), "Are the myths of space utilization costing you more than you know?", Journal of Corporate Real Estate, Vol. 11 No. 4, pp. 237-243. https://doi.org/10.1108/14630010911006729