Is Your Office Half Empty? 3 Ways to Right-Size into 2026
Is Your Office Half Empty? 3 Ways to Right-Size into 2026
Over the past few years, one phrase has echoed through company boardrooms, leadership meetings, and corporate strategy sessions: hybrid work is here to stay. What began as a pandemic response has become a structural shift in how organizations think about their office space, productivity, and cost.
For business leaders responsible for corporate real estate decisions, the consequences are hard to ignore. Office utilization or occupancy rates remain well below pre-2020 levels, lease renewals are coming due, and every CFO is asking the same question: Are we paying rent for space we don’t use?
If your office looks half empty on Tuesday afternoon, you’re not alone. The good news? This challenge presents an opportunity to reimagine, restructure, and right-size your real estate strategy heading into 2026.
Below, we’ll explore how hybrid work is reshaping demand for office space and share three practical ways companies can right-size their facilities, reduce costs, and position themselves for long-term efficiency.
The Hybrid Work Reality
Utilization Rates Tell the Story
In many U.S. metro markets, office occupancy or utilization is hovering between 40–60% compared to pre-pandemic baselines levels. Tuesdays through Thursdays see higher foot traffic, while Mondays and Fridays are often ghost towns. For business leaders, this means paying for space that sits unused for significant chunks of the week.
Shifting Employee Expectations
Hybrid schedules are now considered a standard benefit, not a temporary perk. Employees expect flexibility in where and how they work. Leaders that push for a “five days in the office” mandate risk talent attrition, while those who are 100% remote face challenges with collaboration, culture, and production. The middle ground, or hybrid model is where many companies have landed.
Rising Cost Pressures
While demand for office space has softened, many companies are still paying above-market rent on leases signed during peak years. Add inflation, rising interest rates, and increasing pressure from Boards to cut overhead, and the case for revisiting real estate strategy becomes undeniable.
Hybrid work is not just an HR or culture issue—it’s a bottom-line issue.
Why Right-Sizing Matters
Right-sizing doesn’t necessarily mean downsizing. It means aligning your office space with actual business needs. The goal is to create an environment that encourages collaboration, culture, efficiency, and of course attendance without overpaying for empty desks and unused square footage.
When done strategically, right-sizing can deliver:
Significant cost savings on rent, utilities, and maintenance.
More flexible lease structures that match business uncertainty.
Optimized workplace design that improves employee experience.
Better alignment between real estate strategy and corporate goals.
So, how can business leaders take action? Let’s break it down.
1. Reevaluate Your Current Lease Commitments
The first step is understanding your current situation. Too often, companies wait until six to twelve months before their lease expiration to begin evaluating their options. By then, much of the negotiation Tenant’s leverage has slipped away.
Action Steps for Leaders:
Conduct a lease audit: Review all existing leases, key dates, and renewal clauses. Identify opportunities where you may be paying above current market rate.
Benchmark rent costs: Compare your rent per square foot (including operating expenses or CAM’s) against current market conditions in your submarket. Many tenants are surprised to learn they’re 15–25% above today’s averages.
Engage advisors early: Corporate real estate advisors can help model cost scenarios, renegotiation opportunities, and relocation options up to 24 months before expiration.
This proactive approach ensures you’re not trapped in inflexible terms or paying premiums for space you don’t need.
2. Redesign for Hybrid Efficiency
Hybrid work isn’t about abandoning the office—it’s about reimagining it. If fewer employees are in the office every day, the space should reflect that new reality.
Ways to Reconfigure Your Space:
Flexible Desking: Replace assigned cubicles with hoteling or hot-desking systems. Employees reserve desks when they need them, freeing up square footage.
Collaboration Hubs: Shift from rows of desks to collaborative spaces—conference rooms, brainstorming zones, and team lounges that support in-person connection.
Technology Integration: Invest in video conferencing rooms, acoustic design, and hybrid meeting tools that make remote and in-office collaboration seamless.
Multi-Use Spaces: Design spaces that can flex between team meetings, client presentations, and heads-down work as needed.
The office of the future won’t necessarily be measured by “seats per employee” but rather how effectively it supports culture, connection, and productivity.
3. Negotiate Flexibility into Future Leases
Traditional long-term, fixed leases no longer align with the uncertainty of modern business, (not that they ever really did). Instead, leaders should pursue strategies that build flexibility into lease terms.
What to Look For in 2025–2026 Leases:
Shorter Lease Terms: Instead of 10-year commitments, negotiate for 3–5 year terms with renewal options.
Expansion & Contraction Rights: Secure the ability to scale space up or down as headcount changes.
Sublease & Assignment Flexibility: Ensure you can offload unused space if hybrid models further reduce footprint needs.
Landlord Concessions: Push for tenant improvement allowances, free rent periods, or operating expense caps in negotiations.
By building flexibility into your real estate strategy, you create a hedge against future uncertainty whether it’s economic shifts, industry changes, or new workplace trends. After all, business is not static, so why should your lease be?
The Bigger Picture: Real Estate as a Strategic Asset
Historically, real estate was treated as a fixed overhead cost—a necessary expense but not a strategic lever. That mindset is shifting. For forward-thinking companies, office space is now viewed as a strategic asset that:
Supports culture by providing intentional gathering spaces.
Drives efficiency by aligning footprint with actual needs.
Enhances resilience by maintaining lease flexibility.
When approached strategically, real estate decisions can free up millions of dollars that flow straight to the bottom line, proving capital that can be reinvested into growth, innovation, or talent.
Looking Ahead to 2026
The next 18–24 months will be pivotal for occupiers. Many leases signed pre-2020, and during the pandemic are coming due, offering a rare window to reset terms, reduce costs, and right-size footprints for the hybrid era.
Business leaders who act now will not only cut unnecessary expenses but also position their organizations for agility in an uncertain economy. Those who delay risk being locked into outdated, costly agreements that hinder competitiveness.