Office space planning: right-sizing, utilization and fit-out

Office space utilization is the share of your office that people actually use, and in most portfolios it is far lower than the space was planned for. Leases were signed for best-case growth, floors were laid out for a fixed org chart, and desks were assigned as if everyone came in every day. Hybrid work did not create that gap. It made the gap impossible to ignore.

Good office space planning closes it with evidence. That means measuring how space is really used, sizing the portfolio for actual demand, spending fit-out budgets where they change behavior, and keeping enough flexibility to absorb the next reorganization.

Why does office space planning need a reset?

Office space planning needs a reset because most portfolios were built for attendance that never arrived. Real estate teams have historically over-provisioned office space by 40 to 50 percent, offices reached maybe 60 percent occupancy at most even before hybrid work, and in 2025 the U.S. was set to remove more office space than it added.

In June 2025, CBRE data reported by CNBC showed 23.3 million square feet of office space across 58 U.S. markets set to be demolished or converted that year, against only 12.7 million square feet of new construction. It had not happened in at least 25 years. As Kadence argued in office right-sizing, not downsizing, this is a correction, not a crash.

Hybrid policy is part of the picture. The Q2 2025 Flex Index Report found 43% of U.S. companies on a structured hybrid model with a set number of office days. Just 33% required full-time attendance, barely up from 31% a year earlier. Among enterprises with over 25,000 employees, 70% had adopted structured hybrid. In the Fortune 500, the average number of required office days rose only from 2.3 to 2.9 days per week.

The overbuilding started earlier. Writing in June 2026, Neal Pilaivin, who headed IT operations at HP, Microsoft, Sonos and HubSpot, explained in why companies are right-sizing the overbuilt office that teams planned for best-case growth, such as going from 1,000 to 2,000 employees in a year, because real estate takes time. Today he sees 10 to 15 people on a normal weekday in offices designed for 1,000 to 2,000. He puts real estate and facilities at 5 to 6 percent of a company’s budget, the same as IT. For an organization with 5,000 to 10,000 people, the potential savings run into millions of dollars annually.

What is a good office space utilization rate?

For a full introduction to measuring it, see the workplace leader’s guide to office space utilization and the guide to desk utilization rates. Most offices run at 20–40% average desk utilization, according to Kadence booking data from over 1,100 buildings published in June 2025. CBRE’s 2024-25 study put the cross-sector average at 38%. A good rate depends on your sector and your peak days: midweek, some legal, finance and life sciences buildings pass 70%.

Space utilization is the share of available space, such as desks, rooms or floors, that people actually use over a period. It differs from occupancy, which counts how many people are in a space at a given moment.

Kadence Pulse’s sector analysis covered January 2024 to May 2025. Few buildings pushed beyond the 20–40% range. Kadence’s November 2025 look at space monitoring reported the same pattern: utilization still fluctuates between 20 and 40 percent in many global offices. CBRE’s 2024-25 workplace study shows the spread by sector:

The averages hide a splintering distribution. Since November 2024, Kadence observed more buildings hitting or exceeding 80% monthly utilization. In Professional & Personal Services, some buildings hit 90%+ utilization from February to April 2025. In Tech & Software, 50% of buildings sat between 15–42%. The upper quartile of legal buildings hit 50%+. One portfolio can contain all of these patterns at once, so benchmark each site against its own sector.

How do you measure office space utilization accurately?

Measure arrivals, not reservations, and measure by day of the week. Kadence data published in February 2025 shows the weekly average drops closer to 2 days once canceled bookings are removed, and Mondays and Fridays are the least popular days in every region. Size for the midweek peak, not the weekly average or the policy.

In February 2025, Kadence Pulse found that the magic number is 2. Across Kadence’s customer base, the most common number of days employees book to come in each week is two. Including cancellations, the weekly average fluctuates between 2 and 3 days; once canceled bookings are removed, it falls closer to two. People plan for three visits and make it in twice. If you size on bookings or policy, you size for attendance that does not happen. The Fortune 500’s 2.9 required days, reported in the case for office right-sizing, and the observed two-day norm show that policy and behavior are separate numbers.

Region and industry shift the baseline. Without cancellations, Australia averaged closer to 2.5 days per week and Europe 1.5. Legal and Consulting had the most office bookings, with Medical and Health close behind.

Timing matters as much as volume. Hybrid workers reserve Tuesdays, Wednesdays and Thursdays for collaboration. Back in 2022, Kadence was already tracking this pattern in when people choose to come to the office and why. The June 2025 sector data showed its effect: filtered to those three anchor days, utilization was noticeably higher than the all-days average, with more buildings in the 40–60% range and above. Legal, finance and life sciences peaked sharply midweek. Tech and media showed gentler curves. That analysis also flagged March–April 2025 as an inflection point, with every industry climbing, so refresh your numbers regularly.

What is office space monitoring, and do you need sensors?

Office space monitoring is the practice of understanding how workplace areas are used in real time, across offices, floors and zones. Sensors are one way to do it, but they are costly and slow to scale. Digital signals your workplace already produces, plus reliable check-ins, can show real-time occupancy without new hardware.

Monitoring answers the questions facilities teams already ask. Why is this floor always empty? Why is that meeting room always full? Why does one neighborhood feel overcrowded while another stays quiet? At enterprise scale, the answers shape lease renewals, hub strategies and capital allocation.

Kadence’s November 2025 guide to space monitoring and occupancy describes the limits of hardware-heavy approaches. Sensors, infrared counters, Bluetooth beacons and badge systems were built for static environments. They are difficult to maintain across regions, and they reveal what happened last week, not what is likely to happen next Wednesday in your busiest hub. As Kadence described it then, Kadence Sense instead uses Wi-Fi, Ethernet, badge systems and collaboration tools to show workplace occupancy across a portfolio.

Data quality also breaks down at the human level. Kadence’s tips on making the most of your office space name three common problems:

• Ghost desks: people book a desk and do not show up.
• Invisible workers: people work from home without telling anyone, so teams cannot plan collaboration.
• Inaccurate data: people do not check in properly, so no one knows how the office is used.

The fixes are operational. In October 2024, Kadence suggested practical ways to make the most of your office: automatic check-ins through an API to improve utilization data, checking out of booked lockers, pods and parking spaces to see how those resources are used, and a heat map of popular areas to point to space you could reduce. Whatever method you choose, measure how spaces are used, not who is using them. Trust in the data depends on trust in its purpose.

How do you approach right-sizing office space?

Right-sizing office space means matching your footprint to how people actually work, using data rather than headcount or best-case growth. Decide your working culture first, then design for actual usage rather than theoretical peak capacity. Neal Pilaivin argues that realistic occupancy assumptions can reduce space needs by 40 to 50 percent.

Pilaivin’s June 2026 framework has three steps:

• Decide your culture. Choose office-first, hybrid or remote-first based on your mission and working patterns, not executive gut feeling or competitors. Occupancy analytics give the only honest baseline for that decision.
• Right-size your space. Ask whether you are meeting-heavy or focused on individual work. Even office-first cultures rarely exceed 60 percent daily utilization. Know which rooms are overbooked and which floors are chronically underused.
• Train for distributed management. Proximity bias is real: people who show up get noticed, promoted and retained at higher rates, even when remote colleagues’ work is objectively stronger.

He frames the payoff as three savings. Financial: returned to employees, right-sized provisioning could mean $5,000 to $10,000 more per person per year. Relational: in-person time builds working relationships, especially with the people you collaborate with 80 percent of the time. Temporal: fewer long commutes, and in-person time reserved for onboarding, quarterly planning and all-hands meetings.

Real cases show the range. As Kadence reported in 2025, Karger, a global medical and scientific publisher, moved from fixed desks to hot desking, occupancy tracking and team coordination tools. It consolidated office space across three locations and cut its real estate footprint by 80%. “On a regular basis, we know how many people are coming into the building,” said Adrian Harper, Head of Digital Landscape at Karger. MOO, the design and print company, brought structure to its hybrid policy and boosted office utilization to 70% without adding more desks. Both stories are in Kadence’s case studies. Right-sizing can mean fewer square feet, better-used square feet, or both.

How do you design an office people choose to use?

Design for collaboration and reliability first. In 2022 WFH Research data, face-to-face collaboration was the most popular reason to go into the office. Mitie’s 2025 survey found UK workers lose 68 minutes each week to preventable friction such as poor internet and hard-to-find rooms. Amenities help, but only 29 percent said they contributed to satisfaction.

In July 2025, Kadence covered Mitie research on how poorly designed workplaces cost the UK billions. Mitie surveyed 3,000 UK employees. Scaled across the workforce, their lost time equals a weekly salary cost of 485.2 million pounds and 71.4 billion pounds a year. Fifty-one percent said a poorly maintained workplace was a major factor in their dissatisfaction, and 88 percent said a safe environment contributed to their job satisfaction. Of employees satisfied with their workplace, 89 percent were also satisfied with their employer, against only 23 percent of those unhappy with their environment. Reliability beats novelty.

At the top of the market, landlords compete on experience. In May 2025, Kadence looked at how prime office real estate is competing for survival. London’s 40 Leadenhall, a 34-story tower, offers a wood-paneled library, rooftop dining terraces, a cinema, a Peloton studio and a spa. At 22 Bishopsgate, the top floor let for £122 per square foot, a record for the City. Ben Cullen, Head of UK Offices at Cushman & Wakefield, described the shift: “After Covid, it was just about taking less space. Then occupiers started taking less space, but better space. But what’s happening in the last year or so is that not only are they taking more space, they are taking better space.”

Design can also reflect place. In November 2024, Kadence’s look at the state of the workplace in San Francisco highlighted Okta’s “Commons” project, which turned its 13th floor into a tribute to the city’s neighborhoods, with space ranging from collaborative meeting rooms to quiet zones for deep focus.

Design alone is not enough. A floor that sits half empty on a Wednesday and overcrowded on a Thursday still fails. Space earns its keep when people know when their team is in and can plan their time together.

How much does an office fit-out cost?

JLL’s 2025 global cost guide found office fit-out costs rose in all regions. North America averaged about $3,070 per square meter, against a global average of roughly $1,830/m². Labor and materials inflation, hybrid-ready technology and sustainable building systems drive the increase, which makes it more important to spend where occupancy data shows demand.

Kadence’s April 2025 analysis of the office fit-out as a strategic asset set out the numbers from JLL’s global cost guide. EMEA averaged around $1,970/m², and Asia-Pacific about $1,460/m². In the U.S. and Canada, cost growth slowed to 2.7% in 2023 from 10.1% in 2022, but build-out expenses in 2023 were about 33% above 2019 levels.

Three forces drive the increase:

• Labor and materials. EMEA labor costs rose over 12% in the last 12 months. Half of markets worldwide had labor shortages, and about 75% saw raw material price hikes.
• Hybrid-ready design. More than three-quarters of corporate real estate leaders are investing in better office tech, and 39% have upgraded conference room AV. Movable furniture, modular partitions and operable walls cost more than fixed drywall, but let space convert from solo work to team huddles on demand.
• Sustainability. Upgraded mechanical and electrical (M&E) systems can cut long-term operating costs by 10–40% through energy savings. Where green retrofits are popular, M&E averages 29% of fit-out costs, and up to 50% in some cases.

Companies are still investing: 59% of organizations globally plan to increase spending on office design and fit-outs in the next five years. The pattern is fewer, better offices. In the same April 2025 analysis, Kadence pointed to TravelPerk’s Barcelona headquarters, which deliberately included fewer traditional desks and more collaboration space, plus a café, gym, outdoor terraces on every floor and a wellbeing room. Data keeps that investment honest: occupancy and booking patterns show which space types people use, so you avoid unnecessary fit-out costs elsewhere.

How do you plan occupancy for continuous change?

Occupancy planning is deciding where people and teams will work across floors and buildings as the organization changes. Org decisions take weeks or months, while space decisions last years. The answer is to keep layouts reassignable and to test scenarios before committing. Airbnb’s headquarters and stack planning software show two ways to do this.

Pilaivin notes, in the case against the overbuilt office, that building physical space takes five to ten years in major markets, and developers want five and ten year leases. Ben Cullen put the risk plainly in the race for prime office space: “You need to start thinking about commitment, because you cannot deliver an office building into a market at speed.”

In January 2026, Kadence examined how Airbnb designs offices for continuous change. Airbnb’s headquarters at 999 Brannan Street in San Francisco, designed by its in-house Environments Team with WRNS Studio, does not mirror a fixed org chart. It uses repeatable zones of open work areas, enclosed rooms, communal tables and shared amenities, which WRNS Studio calls a “kit of parts.” Floorplates break into adaptable areas that can be reassigned without major rework. Teams can move without triggering a redesign, and change stops cascading into disruption.

Architecture can only absorb so much change. Across multiple floors, buildings and leases, flexibility depends on how decisions are governed. In that January 2026 piece, Kadence framed this as the role of SpaceOps: dynamic stack planning to see how people and functions are distributed, scenario planning to compare growth, contraction or reorganization as parallel futures, and coordinated move management to execute cleanly. The principle matches Airbnb’s floors: keep decisions provisional until uncertainty resolves.

What does a good office space plan include?

A good office space plan links evidence to commitment. It benchmarks utilization, counts real attendance, fixes data quality, sets policy before footprint, puts fit-out money where demand is proven and keeps layouts flexible. Each step lowers the risk of locking a changing organization into a long lease built on assumptions.

• Measure first. Benchmark against the 20–40% range and your sector, count arrivals rather than bookings, and find your midweek peak.
• Fix the data. Remove ghost desks and missed check-ins, use signals you already have, and measure spaces, not people.
• Decide the culture, then the footprint. Design for actual usage, not theoretical peak, and prepare managers for hybrid teams.
• Invest in fewer, better spaces. Fix reliability before perks, and put fit-out money where occupancy data shows demand.
• Stay flexible. Favor reassignable layouts, and test scenarios before signing the next long lease.