Here’s what I learned from heading IT Operations at companies like HP, Microsoft, Sonos, and HubSpot: real estate and facilities managers have historically over-provisioned office space by 40 to 50 percent.
They plan for best-case growth scenarios, going from 1,000 to 2,000 employees in a year, because real estate takes time. You have to get ahead of the curve. Build for everyone to be in the office. Plan for optimistic projections.
But here’s the reality: even before hybrid work became standard, offices were never full. Maybe 60 percent occupancy at most. People were always on vacation, traveling for conferences, working from different locations. The space was built for a theoretical peak capacity that never actually materialized.
Now, with distributed teams and flexible work arrangements, that over-provisioning has become impossible to ignore. When I visit offices designed for 1,000 to 2,000 people and see 10 to 15 people on a normal weekday, the math becomes stark.
The Three Types of Big Savings
What I’ve discovered is that right-sizing your real estate isn’t just about reducing costs. It’s about three interconnected types of efficiency that compound when you get them right.
Financial Savings: The Obvious Win
For an organization with 5,000 to 10,000 people, the potential savings run into millions of dollars annually. Here’s my back-of-envelope math: if you right-size your office provisioning and return that saving to employees as salary increases, you’re looking at $5,000 to $10,000 more per person per year. Or you invest it in bringing everyone together intentionally a few times a year, rather than maintaining expensive urban office space that sits mostly empty.
The key insight: nobody needs an assigned desk anymore. Even office-focused companies rarely see more than 60 percent daily utilization. If you’re realistic about actual occupancy, you can reduce space needs by 40 to 50 percent without meaningfully changing how people work.
Relational Savings: The Hidden Multiplier
Here’s what’s less obvious but equally important: when you genuinely know a colleague, everything else becomes more efficient.
Say you need help from someone on another team. If you’ve worked alongside them, had dinner with them, and understand how they operate, you send a message and get a response. You’re not another task in their inbox. You’re a person they care about helping.
This is especially critical for the people you collaborate with 80 percent of the time. The relational investment pays dividends in reduced friction, faster decisions, and better outcomes.
At Microsoft, half my team worked in India. We traveled there two or three times a year specifically to build those relationships. It wasn’t about the work we could do during those trips. It was about the work that became possible afterward.
The organizations tracking this properly are using tools like Kadence to understand how cross-functional collaboration shifts when teams have regular face-to-face time, measuring attendance patterns and interaction data over time rather than relying on gut feel about what’s working.
Temporal Savings: The Time Equation
The third type of saving is about time, both commute time and decision time.
If your policy eliminates three-hour daily commutes for people who would otherwise sit on Zoom calls all day, you’ve given them their lives back. But you’ve also created space for more intentional collaboration when people do come together.
Instead of defaulting to daily office presence, you can be strategic. Bring people together for specific purposes: onboarding new employees who need exposure and natural encounter time, quarterly planning sessions that require deep collaboration, and all-hands meetings that rebuild alignment. The temporal saving isn’t just about less commuting. It’s about using in-person time for things that actually require it.
The Disconnect Problem
Here’s the challenge: everything I just described runs headlong into the reality of how real estate actually works.
Organizations are operating at speed. But building physical spaces takes five to ten years in major markets. Developers want five and ten year leases, not flexible arrangements that match how companies actually operate today.
We had this problem at HubSpot. The technology was good, the spaces were well-designed, but utilization was poor. Too much space built for theoretical needs rather than actual usage patterns.
The companies getting ahead of this are making portfolio decisions based on real occupancy data rather than assumptions. With Kadence Sense, organizations can see exactly how space is being used across their portfolio, which floors, which days, which room types, and use that data to inform lease decisions, consolidations, and right-sizing before they sign the next ten-year commitment.
A Three-Step Framework
Step 1: Decide your culture. Are you office-first, hybrid, or remote-first? This decision drives everything else. Make it based on your actual mission and working patterns, not executive gut feelings or what competitors are doing. Occupancy analytics tell you how your people are actually using space today, which is the only honest baseline for a policy decision.
Step 2: Right-size your space. Once you know your culture, think carefully about how people actually collaborate. Are you meeting-heavy or more focused on individual work? What kinds of decisions require physical presence? Be realistic: even office-first cultures rarely exceed 60 percent daily utilization. Design for actual usage, not theoretical peak capacity. You need to know which rooms are overbooked, which floors are chronically underused, and which configurations are driving the outcomes you want.
Step 3: Train for distributed management. This is the piece most companies miss. If you’re going hybrid, your managers need different skills. They need to evaluate and support remote employees fairly and design productive experiences for distributed teams. The proximity bias is real: people who show up to the office get noticed, promoted, and retained at higher rates, even when the work of remote colleagues is objectively stronger. If you don’t address that explicitly, the rest of your strategy will underperform.
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The Opportunity
We’re still early in this transformation. The companies that figure out how to combine human potential with right-sized real estate, solving the savings equation across financial, relational, and temporal dimensions, will have real competitive advantages. Not just in cost, but in talent attraction, team effectiveness, and organizational resilience.
The office isn’t dead. But the way most organizations have been thinking about it probably is. The ones moving forward are building on data, not assumptions, and the gap between them and everyone else is widening.
If you want to understand how your portfolio is actually being used and where the right-sizing opportunity sits in your organization, book a demo with the Kadence team.
