Space utilization describes how actively and efficiently real estate is used over time. It is commonly measured as occupancy (how many people are present) and utilization rate (the percentage of time a desk, room, or area is used during business hours).
Why it matters
- Real estate is typically one of the largest fixed costs for organizations.
- Unused or poorly allocated space generates direct and indirect expenses without creating value.
- Optimized space can reduce rent and operating costs while improving employee experience and productivity.
Technical terms
- Occupancy: the count of people present in a space at a given time.
- People sensing: technologies that detect presence or movement of people without identifying them.
- Spatial intelligence: insights derived from occupancy and movement data, used to optimize layout, scheduling, and operations.
- BMS (Building Management System): software that controls HVAC, lighting, and other building systems.
The financial impact of poor utilization is rarely obvious on a monthly P&L. Instead, it appears as smaller, recurring drains across multiple line items that compound over time, raising cost per employee and lowering return on real estate investment.
- High real estate costs
- Renting or owning more square footage than needed increases fixed cost per employee.
- Underused floors or zones amplify the cost of each square foot that actually delivers value.
- Energy and operational waste
- HVAC and lighting often run on schedules or zones, burning energy for empty spaces.
- Excess energy spend shows up as higher utility bills and larger carbon footprints.
- Inefficient maintenance and cleaning
- Cleaning and maintenance resources are often scheduled by area rather than demand, increasing labor costs and supplies spent on unused areas.
- Lost productivity and poor employee experience
- Crowded or mismatched spaces (too few collaboration areas, too many desks) disrupt workflows, increase time wasted finding workspace, and reduce overall productivity.
- Missed revenue or utilization opportunities
- Flexible workspace operators, hotels, and retailers fail to monetize underused areas when they lack reliable occupancy data to support dynamic pricing or space reconfiguration.
- Poor capital and lease decisions
- Without accurate utilization analytics, companies renew leases or commit to expansions based on faulty assumptions, locking in unnecessary long-term costs.
These small, ongoing drains add up to higher cost per employee, lower return on real estate investment, and reduced competitiveness.
Many organizations rely on incomplete or invasive approaches to track space usage. These methods produce blind spots or generate data employees distrust, so optimization initiatives lack accuracy and stakeholder buy-in.
- Manual counts and periodic surveys
- Infrequent and labor-intensive; they miss daily and hourly patterns.
- Badge and Wi-Fi analytics
- Badge data only tracks those who badge in. Wi-Fi can misreport devices as people and raises privacy concerns.
- Camera-based systems
- Provide granular data but often conflict with privacy expectations and regulatory constraints.
- Static scheduling and intuition
- Decisions based on habit or executive preference ignore real usage dynamics.