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Johnson Chou, left, brought in another architecture firm to sublet his unused space.
Johnson Chou, left, brought in another architecture firm to sublet his unused space.

Property Report

Rethinking unused space creates a leaner, fitter office Add to ...

When Johnson Chou bought and renovated a downtown Toronto office building to create a studio for his architecture and design firm, Johnson Chou Inc., he realized the space was just too big.

Rather than seeing the space sit unused he subleased it.

Empty or underutilized office space, according to Mr. Chou, is too often filled with everything from unused furniture to bankers' boxes. "I really feel that spaces that look purposeless, empty or ill-conceived reflect poorly on an organization," the designer explains.

So, when the owner of a two-person architecture firm came looking for office space, Mr. Chou agreed to share part of his new studio.

Empty cubicles, unused floor space and cavernous, litter-strewn corridors are common in offices across Canada. Companies locked into long-term leases negotiated in times of growth suffer have plenty of unused space. Others simply fail to manage their space as their work force shrinks and expands.

"Where we've gone in and done audits of space usage, sometimes we're finding up to 25 per cent of space can be underutilized," says Judy Amoils, managing director of consulting services for global real estate firm CB Richard Ellis.

While no definitive study exists quantifying how much inefficient office usage costs Canadian companies, real estate-related costs are often the largest in a company's budget after salaries, sometimes gobbling more than 15 per cent of a firm's operating revenue.

Excess space can kill the bottom line. Using CBRE's national average of $23.93 a square foot for class-A downtown office space as a guide, a firm that occupies 10,000 square feet but uses only three-quarters of that potentially wastes $60,000 a year. But, as Ms. Amoils points out, perceptions of how an office should function are changing. The long-held assumption that employees should be proverbially chained to their desks from 9 to 5 are long gone.

"A lot of companies are questioning whether they should allocate office space and are taking space away from people, but in return, they're giving them the mobility tools they need and a lot more flexibility by allowing them to work from home or work from satellite offices," she says.

Ms. Amoils stresses, however, that making better use of office space requires strategy.

Here, our panel of experts weighs in with five tactics to turn your empty looking office into a model of efficiency:

Sublet in a way that makes sense: As Mr. Chou found, one effective way to reduce overhead is subletting unused space. And by renting to a like-minded architecture firm, he reaped other rewards. "We're three times larger than them, but we actually give each other jobs," he says of the symbiotic relationship that's blossomed. "We both like the modern aesthetic, so we bounce ideas off of each other and we sometimes share staff. That's an example of where you have extra space and you can utilize it to your advantage."

Move to smaller work stations: Innovative work stations can dramatically reduce a company's footprint while providing functional alternatives to the bleak cubicle, says Margo Smith, principal at Vancouver-based Designsmith Interior Designs Inc. "A lot of companies will order a certain size desk because that's what they've always done, not taking into account the fact that technology has gotten smaller," she says. "You don't need the big corner work station because you're not using large monitors any more."

Focus on open spaces: Traditional office configurations waste space, says Stan Krawitz, president of Toronto-based real estate brokerage and office outfitting firm Real Facilities Inc. "For example, every closed office has doors which require swing space, and entrances into offices which aren't used," Mr. Krawitz explains. "When you're in an open office, none of that space is dead space."

Incorporating multi-functional elements can increase efficiency, says Loren Cavallin, head of interiors with Perkins + Will, an interior-design firm in Vancouver. "One of our clients needed a large meeting room because they occasionally stage events, but they're a small company," she recalls. "We introduced a sliding glass partition in their meeting room, allowing them to open it up onto a corridor so they could also make use of that whole space."

Take the hotel approach: More workers are telecommuting, says Keath Seeton, a partner with Vancouver-based design firm SSDG. That means offices can reduce work stations and introduce a "hotel" system - employees who occasionally work away from the office can book a desk if they need it. Not only can this save money, it also boosts engagement and employee retention by allowing workers to work in a way that suits their needs, Mr. Seeton says.

But, as he notes, "hotelling" works for some roles and not others. Companies might want desks for their accountants, for example, while sales staff - many of whom are rarely in the office - could share space with colleagues.

Think collaboration first: Mr. Chou says futurists greatly exaggerated the demise of the traditional office. They long ago predicted a knowledge-economy work force that was almost entirely home-based. "People are social animals and the exchange of ideas is paramount," he says.

That's why Mr. Chou urges clients to turn underutilized spaces into informal meeting or collaboration areas where they can share ideas. "It's hard to quantify the return on investment, but I think this type of approach is a necessity," he says. "It's always well-received by employees and they're more likely to work harder and longer."

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