Space utilization is more important than ever before. If you’re not using space analytics to level up your real estate strategy, then you are missing out on a crucial opportunity. Space utilization analytics gives you a holistic view of your capacity in relation to your employee or staff headcount.
For instance, are you leasing too much square footage for your company size and growth plan or do you need more? A little knowledge goes a long way when it comes to making smart decisions that will move your company forward. This blog post is all about why space data analytics matter and how they’ll benefit your company’s overall strategy. Read on if you’re interested in leveling up with space data analytics!
What are Space Utilization Analytics
In its simplest form, space analytics are metrics that break down your square footage vacancies in comparison to occupancies. Every space type needs to analyze their space utilization data; whether you manage office, co-working, retail, restaurant, healthcare, or warehouse space, etc. Space utilization metrics to help inform how to staff your space, how to estimate foot traffic and how to optimize your overall space usage.
Key Metrics to Follow:
- Desk Ratio – This is measured by taking your employee headcount and dividing it by your capacity. For example, for many office space occupier’s there is a sweet spot in that you want your desk ratio to hover between 80% – 90%. That way you have room for additional hires or hot desks but at the same time your office space isn’t busting at the seams. This percentage varies per space type.
- Capacity by Space Type – How many people in total can be accommodated per space type.
- Headcount by Space Type – How many employees or staff are there currently per space type, ie. office, co-working, retail etc.
- Total Square Footage – The total sum of a given space in square foot measurement..
Our Lease Administration module includes Occupier Analytics Dashboards which gives you insights into your capacity and headcount by space type as well as your desk ratio. Space utilization is the data driven metrics behind the usage of a given space that should guide and influence your real estate decisions.
Space Utilization and Space Management
In the aftermath of COVID-19, the way in which employees, shoppers, co- workers and others use and interact in shared spaces has changed. Organizations need to navigate social distancing measures and ensure that their spaces are being used thoughtfully, productively, and in a cost-effective manner. For example, if you have adopted a hybrid model, does your organization still need to pay for a large office footprint if your employees are only expected to come in once or twice a week?
Why Does Space Utilization Matter in Your Real Estate Strategy
If you are managing a real estate portfolio and not leveraging space utilization analytics, then you are essentially flying blind. This collection of data points is incredibly insightful into how your space is being leveraged and used. From retailers, to restaurants, and office spaces, the way we utilize space has evolved dramatically.
Many retailers, for instance, have incorporated an omni-channel strategy for their business. This helps to diversify their physical presence with ecommerce, third party marketplaces, and a retail app, just to name a few. Adoption of an omni-channel retail strategy should help inform where that retailer needs space, whether it is a physical store, a warehouse for inventory, or a pop-up shop.
In the past few years, restaurants have also adjusted their space strategy. For example, mask mandates and lower capacity guidelines from local government jurisdictions forced restaurateurs to either find outdoor space or think about third party food delivery services as well as ghost kitchens. So, understanding how their space is used and impacts their business and bottom line is imperative for success.
One additional example is office space. The work-from-home test that began with the onset of COVID-19 has since evolved into the hybrid model experience. Many organizations are considering and testing out a model in which their employee base works from home part time and comes into the office on a need-be basis, whether that is for meetings or team collaboration projects. The third workspace trend has also gained traction in which office employees can choose to work from home, work from the office, or work from the third workspace.
All of these changes in how we utilize space have great implications on how organizations should approach their real estate strategy.
The Future of Real Estate and Data-Driven Strategies
Data-driven strategies are the future of real estate. It’s time to level up your real estate strategy by making space utilization analytics a key data point for your business. If you want to keep up, here are some tips that will help you start unlocking your data at work today. First, determine what metrics matter most to your vertical by looking into how other companies measure success. Next, use these insights to set goals for yourself or your team that align with business objectives like lower cost per square foot, increased productivity, and more revenue generated from existing or new leased assets, etc. Finally, map out a plan for how you can achieve those goals! Our Lease Administration module gives your team access to our Occupier Analytics Dashboard which visually organizes and helps you digest the data embedded in your lease portfolio.
If you are interested in space utilization and real estate analytics, our team would be happy to give you a demo of Occupier Analytics and help you start leveling up your real estate strategy.