Modern Metrics Measure Reality

The key occupancy metrics

Corporate real estate teams are using these five key data points—utilization, sharing ratio, design density, vacancy and people density—to assess the performance of their office portfolios.

Figure 14: Top five office occupancy benchmarks in 2022

Source: CBRE 2022 Occupancy Benchmarking Program.

From measuring a plan to measuring reality

Traditionally, occupancy metrics measured how a company plans to use space. For example, density metrics measure the efficiency of a design or occupancy plan, while vacancy and occupancy rates measure how space is assigned or allocated to teams and individuals.

Economic uncertainty and hybrid work are placing new emphasis on quantifying the cost of underutilized space. As a result, corporate real estate leaders need to measure the way space is planned and how space is used in real life. Utilization data is the key to understanding the new realities of hybrid working environments.

Figure 15: Measuring a plan versus measuring reality

Source: CBRE 2022 Occupancy Benchmarking Program.

Utilization measures space efficiency

Utilization data is usually captured at the building level using badge swipe data from existing security systems. Capturing utilization at the building level is often referred to as a show-up rate since it identifies how many people came in, but not necessarily how long they were on site.

Building-level utilization is a powerful way to measure how efficiently a building or portfolio is used on a macro level, but is not granular enough to provide insights on use patterns and employee preferences within a building.

Sensors and Wi-Fi data provide both macro and micro level data since they can measure real-time utilization for individual spaces and groups of spaces (including workspaces, rooms, neighborhoods and zones). Using sensors provides a consistent and accurate way to understand which space types are used most often.

Top five sources of utilization data

The five most common sources of utilization data offer varying levels of granularity and accuracy. The use of visual observations dropped to 34%, from 56% in 2021, a pattern which will likely continue as data accuracy is prioritized and pricing for sensors continues to fall.

Figure 16: Top five sources of utilization data

Source: CBRE 2022 Occupancy Benchmarking Program.

Why utilization measurement is changing

Prior to the pandemic, utilization data was used primarily for space optimization and densification efforts. The initial response to the pandemic prompted a wave of interest in measuring occupancy and utilization to support social distancing and workplace re-entry. Now, utilization data is used to track return-to-office progress, employee work preferences and habits.

Badge swipe data provides high-level insights into how buildings are being occupied and is the default input for portfolio planners when reviewing the supply and demand of space. However, there’s been a decrease in organizations attempting to use Wi-Fi and network analysis, mostly due to the accuracy of the outputs, which can be skewed by the use of multiple devices, and the time-consuming, complex set-up required, which is further complicated by internal data collection approvals and processes.

There’s now a focus on leveraging utilization data to craft new work experiences. Identifying where employees work can help planners ensure they have meaningful interactions in the office by locating related personnel and amenities nearby.

Utilization data will also play a key role in assessing the quantity, quality and performance of spaces. There will be greater focus on quantifying space demand based on actual use patterns and to justify investment in technology and design changes based on measurable work habits. Utilization data will also be integrated into building automation systems to help power smart buildings. In 2023, the demand for sensor-based utilization data will increase as companies seek more granular data to identify cost efficiencies and guide ESG commitments.

The business case for utilization

Many organizations struggle with articulating the value of utilization data, so such efforts fail to gain organizational support or funding. Investments in utilization sensors and analytics tools may appear expensive when considered in isolation. However, contextualizing the benefit of utilization data in terms of supporting and meeting business objectives strengthens the business case:

OPTIMIZE SPACE

Validating new demand for space is critical to portfolio management in hybrid work environments. Utilization data quantifies actual space demands and identifies the type of spaces workers prefer.

IMPROVE WORKPLACE EXPERIENCE

Empowering employees to choose where, when and how they work improves their experience, which ties directly to engagement and retention.

REDUCE ENVIRONMENTAL IMPACT

Using utilization data to optimize HVAC systems to improve comfort levels while managing energy spend and carbon reduction more effectively.

INCREASE OPERATIONAL EFFICIENCY

Integrating utilization with building management and control systems can automate a building’s response to occupancy changes and environmental factors.

DRIVE FINANCIAL SAVINGS

Optimizing space and increasing operational efficiency can reduce ongoing occupancy and operational costs.

Utilization also measures employee experience

Understanding how space is used helps identify space optimization and workplace experience improvements based on employee preferences and work patterns. By tracking how improvements impact space utilization over time, organizations can quantify the value created in workplace design, technology and experience investments.

Thirty-six percent of respondents track utilization in collaboration or amenity spaces. While most organizations still rely on visual observations for this data, ceiling-mounted area sensors are the most popular technology tool for automating the capture of utilization data.

Figure 17: Utilization data sources for collaboration spaces in use

Source: CBRE 2022 Occupancy Benchmarking Program.

How hybrid working impacts metrics and reporting

The rising dependence on utilization data is not the only change to occupancy metrics. Traditional occupancy reporting, terms and metrics are being updated to measure new ways of working.

New occupancy metrics for new ways of working

To measure portfolio performance more effectively in hybrid environments, CBRE has refined the terms and metrics in its Occupancy Benchmarking program. This includes updating terms in the context of hybrid working and adding new terms and metrics.

Figure 18: Updated terms for select occupancy metrics

Note: See the Appendix for more definitions of the terms contained in this report.
Source: CBRE 2022 Occupancy Benchmarking Program.

Figure 19: Example of new terms used in an office-first planning concept

Source: CBRE 2022 Occupancy Benchmarking Program.

Driving data quality through integration

Modern occupancy metrics rely on data from multiple parts of a business. Integrating these data sources directly with a company’s space data management system, or indirectly through a data warehouse or data lake, helps automate planning processes and improve data quality.

Figure 20: How data is integrated

Source: CBRE 2022 Occupancy Benchmarking Program.

Modern metrics enabling portfolio optimization

Starting in Q1 2021, CBRE launched a survey of Occupancy Management clients to understand return-to-office trends. Seventy-seven percent of respondents planned portfolio optimization projects during the pandemic. While most optimization methods focused on reducing space, recent conversations have shifted to strategies for rebalancing and maximizing space—most notably, space-sharing strategies that can accommodate future business growth within existing spaces. While space optimization strategies are shifting, each approach relies on utilization data.

Figure 21: Design changes during the pandemic

Source: CBRE 2022 Occupancy Benchmarking Program.