Occupancy cost

The cost of occupancy per square foot of space used by the company. By tracking this KPI, Facilities Management can identify areas where they can reduce costs and optimize the use of space.

As businesses strive to remain competitive, reducing costs while maintaining the quality of services provided is a priority. One area that can have a significant impact on the bottom line is occupancy cost per square foot. This Key Performance Indicator (KPI) helps to identify ways to optimize space utilization and reduce costs, ultimately leading to increased profitability. In this article, we will explore the meaning and actionable insights of this KPI and how smart space management can help save big bucks.

Unlocking the Secrets of Occupancy Cost per Square Foot

Occupancy cost per square foot refers to the cost of occupying a particular space, divided by the square footage of that space. This KPI can be used to track the total cost of occupancy, including rent, utilities, and maintenance fees. By monitoring this metric, Facilities Management can identify areas where costs can be reduced, such as unused or underutilized space.

Another insight that can be gained through this KPI is the comparison of occupancy costs in different locations. For example, if a company has multiple offices across different cities, comparing the cost per square foot in each location can help identify areas where expenses can be optimized. This information can inform decisions about where to allocate resources and which locations may be more cost-effective.

How to Save Big Bucks with Smart Space Management

Smart space management is a strategy that involves optimizing the use of available space to reduce costs and increase efficiency. One approach is to implement hot-desking, where employees share desks and workstations, allowing for a more flexible use of space. This can lead to significant savings on rent and utilities, as less space is required to accommodate the same number of employees.

Another tactic is to implement a desk-booking system that allows employees to reserve desks and workstations in advance. This ensures that space is utilized efficiently and reduces the need for extra space to accommodate peak periods. Additionally, it can lead to a more collaborative work environment as employees from different departments can interact more easily.

Incorporating remote work policies can also help to reduce occupancy costs. By allowing employees to work from home or other remote locations, less space is required, leading to savings on rent, utilities, and other expenses. This strategy can also lead to increased employee satisfaction and productivity, as they have more flexibility in their work arrangements.


Occupancy cost per square foot is an essential KPI that can help Facilities Management to identify ways to reduce costs and optimize space utilization. Through smart space management practices such as hot-desking, desk-booking systems, and remote work policies, businesses can significantly reduce occupancy costs. By taking a proactive approach to space management, companies can achieve cost savings while providing a comfortable and collaborative work environment for employees.