How to Determine Your Office Space Requirements

This article was updated on 6/05/2024

Determining your office space requirements can seem like a daunting task - particularly if this is your first time renting commercial space. Even if this isn't your inaugural venture into the relatively complex world of commercial real estate leasing, establishing your requirements and preferences - both for now and in the future - can be a somewhat anxiety-inducing experience.

But you needn't be afraid. In actuality, there are some relatively straightforward questions that should be addressed in order to determine your company's office space requirements.

How Many Employees Will Be Occupying Your Office?

The first thing you'll need to consider is how many employees will be working from your office location. To develop an understanding of your prospective headcount, you should begin with the following questions:

How many employees do you need to accommodate in an office?

Consider how many of your employees will be working from the office and how frequently they will be doing so.

Do you anticipate that number will change in three to five years?

While it can be difficult to predict how your company will evolve over a number of years, making an educated prediction will be critical to determining the amount of space your company will require.

As your business grows or contracts, will you need multiple office locations, or can you operate from a single location?

If you anticipate a change in employee headcount, you'll want to consider whether your company will need multiple, smaller office locations, or if a single, centralized location will be the optimal approach.

How Much Office Space Do You Need?

The amount of space your organization will require for its commercial office will vary based on the type of buildout, or office layout, that you select - a buildout focused on private offices and cubicles will necessitate more space than an open plan buildout, for instance. On average, though, CoStar data indicates that in 2020, U.S. offices allocate approximately 214 square feet per employee. That standard encompasses both the employee's personal workspace, as well as their share of communal areas such as conferences rooms, kitchens, printer rooms and reception areas.

However, multiplying your company's number of employees by a factor of 214 doesn't tell the entire story of how much space your organization will require; you'll also need to understand the difference between rentable and usable square feet.

What Office Buildout Will Work Best for Your Business?

This decision will be significantly informed by the types of tasks carried out by your company, and what its priorities are with regard to considerations like client interaction, privacy, collaboration, productivity and wellness. The three most common types of buildouts are open plan, collaborative and private office. Each of these buildouts offer distinct attributes and challenges, and the layout you ultimately select will have an impact on almost every facet of your buildout costs and occupancy experience.

What Type of Lease Should You Execute?

There are three primary lease types that most office users will consider: direct leases, subleases and coworking agreements.

• A direct lease is a contract that is established directly (hence its moniker) between your organization (the tenant) and the owner of the property (the landlord). It enables you to customize the office space to your company's specifications.
• A sublease is an arrangement for your company to lease space from another business, which already has an existing, direct lease. In this case, you will be the subtenant and will likely occupy the space as is and have limited flexibility to tailor the space to your needs.
• In a coworking space, you aren't actually signing a lease at all, but creating an agreement or license between your organization and the operator of the space that provides your company with explicit rights to utilize the facilities. A variety of coworking options are available, and these alternatives can be combined in different configurations, including a fully private office, a dedicated desk or seat in an open area or a commitment to provide some available seat in the suite for a prescribed number of days per week.

What Is an Office Space Program? (And Why Should You Consider One?)

An office space program is a strategy that your business can develop in concert with an architect to conceptualize and design an office environment that satisfies your company's requirements, implements industry-specific best practices and accurately reflects your organization's mission, culture and values.

While it may not get you to the moon and back, a space program for your office will take into account your company's technology and space needs, workflow and recruiting objectives, as well as aesthetic and cultural considerations, to develop an office that realizes all of your organization's office ambitions. Part of this process will involve ascertaining the number of common area spaces your company will need, including reception areas, conference rooms, collaboration spaces, kitchens, etc.

How Much Time Should You Allow for the Office Leasing Process?

To procrastinate is human, but when it comes to your office lease it can be notably detrimental to your prospects. Whether you're renting your first office space, renewing or relocating, timing is key. If you wait until the last minute, you cede a substantial amount of leverage to the landlord. Confronting your office requirements 6-24 months in advance of your existing lease expiration or targeted occupation date is critical to ensuring that you have as many options as possible.

Where your company falls on that 6- to 24-month spectrum will depend primarily on the amount of total space you require and how extensive of a buildout you anticipate; larger tenants with more complex buildouts will want to allocate more time for the process, while tenants utilizing coworking space or subleasing space in its existing configuration will require less time.

What if You Already Have an Office?

If you already have an office, but your lease is expiring or your requirements have shifted, you'll still want to consider most, if not all, of the items detailed in this article thus far. However, there are some additional parameters that you'll have to bear in mind, as well.

• Review renewal and termination options: It is critical that you carefully review all of the salient details of your current lease, including your expiration date, holdover charges and renewal and termination options. Both renewal and termination options typically have to be exercised well in advance of your lease's expiration date, so it's important to be aware of the exact requirements of each clause in order to take maximum advantage of the options that are available to your organization.
• Decide whether to renew or relocate: This is a complex decision that will be based on myriad factors. Nonetheless, even if you are fairly certain you want to remain in your existing premises, it's important to consider alternatives - both as a matter of prudent due diligence and in order to create leverage with your current landlord.