Enhancing Agility in Corporate Real Estate: Development of an Occupancy Simulation Model for Space Optimization and Decision-making

Determining the appropriate amount of office space to rent and maintain in the post-pandemic era is a complex challenge for companies. Striking the right balance between office space size and occupancy is an ongoing dilemma. Although the pandemic has stimulated this conversation, designing effective real estate strategies that respond to hybrid working and determining the optimal office size continue to be persistent challenges for many organizations.

This paper demonstrates how space occupancy/spatial utilization measured at the building floor level over three years can provide future projections and insights about space usage. Specifically, it discusses the managerial concern about not providing enough space, a factor that often hinders significant reductions in corporate real estate footprint.

Furthermore, this paper presents a simulation tool specifically tied to real estate cost savings, a percentage of reduction in space, and the associated risk of exceeding capacity. This simulation tool can be customized to match an organization's specific real estate costs and portfolio, and it can facilitate communication among corporate real estate, finance, HR, data analytics, and space planning teams.

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