Utilization Is the New Rent: Why Real Estate Strategy Needs a Data Overhaul for 2026

Corporate real estate leaders traditionally worked according to predictable 6 to 18 month cycles. They were handed a headcount, defined their space requirements, visited buildings and weighed up their options before signing a multi-year lease.

That model depended on one fundamental assumption: that workers would show up to a small number of locations in predictable patterns - the five day working week.

But that's no longer a given. The way people work has changed forever, and the old rules no longer apply.

At Croissant we've tracked more than 3.5 million hours of co-working across thousands of spaces around the world over the last 10 years, and found that hybrid work is no longer an experiment, it's the new rhythm of working life.

The demand for permanent office space fell by a staggering 41% between 2019 to 2023 at some companies. As a result over two thirds of corporations anticipate that their real estate portfolio will shift away from traditional leases to flexible ones by 2027.

The world of work is unrecognizable, but too many real estate decisions are based on old rules.

The danger of this? Offices that lie empty, spaces that are over-subscribed meaning employees have to fight for their desks, high cost-per-use for companies trying to reduce overheads into 2026, and too many inflexible long-term leases that companies are locked into regardless of how they're used.

Join us as we explore why change is the only constant for real estate leaders and how leading organizations are undergoing a powerful telemetric transformation.

The changing face of real estate in 2025

1. Workforce distribution is in constant flux

Increasingly, when companies raise funds, they want to hire 'where the talent is', not just 'where the HQ is'.

The World Economic Forum has projected that the number of digital jobs that can be done from anywhere will rise by a quarter by 2030 to a staggering 92 million roles. 60-70% of organizations now operate some form of hybrid model.

This means more teams than ever are cross-border and highly distributed rather than concentrated in one urban hub. In fact, cross-border hires doubled from 2020 to 2023. While highly advantageous for attracting and keeping tech talent - this means the location of employees in 2025 is constantly changing, and impossible to predict.

This makes the job of a real estate leader, doing their best to predict what kind of spaces will be needed into the future, infinitely more challenging. In fact, many static space plans are out of date before the lease is even dry.

2. 2026 budget cycles demanding cost savings

Put simply, CFOs are tightening their belts for 2026 and real estate teams are feeling the pinch.

A survey of real estate leaders found that 80% are focused on portfolio optimization next year, with cost reduction the main objective for a third of those leaders.

It's no surprise CFOs are looking to their real estate portfolios to cut costs - just a 10% reduction in office space could save them upwards of $30 million in annual rent and maintenance costs. Croissant hears from real estate leaders every day and we're seeing a resurgence in a 'do more with less' footprint.

This might mean cutting space, running what they keep more efficiently, upgrading to more energy-efficient, high-performing stock, or downsizing into smaller hubs. Real estate leads face the twin pressure of cutting overheads without compromising on the need for high-ROI spaces for collaboration.

3. Vendor onboard and overwhelm from a mixed portfolio

So a new department suddenly gets a new headcount, but it's spread across three regions. Though headcount may be growing, only a fraction of these workers are actually near legacy hubs. If they do live nearby, they won't come into the office five days a week, and their work patterns can be hard to predict.

As leaders pivot to adjust their portfolio to match employees' flexibility, this comes with the need to onboard and set governance approaches for potentially dozens of external vendors, satellite office providers, partner spaces and regional hubs.

This requires entirely new playbooks for security, brand, data protection and worker experience across a mixed estate of hubs, satellite offices, and partner spaces. With portfolios a mixed bag of assets, real estate leads are having to upskill rapidly, and juggle more relationships than ever before.

4. Generic flex offerings don't cut it

In the post-pandemic ecosystem, many companies reached for a quick fix. Businesses opted for a WeWork membership or fixed coworking stipend which they rolled out as a blanket offering to all staff, hoping that would be a catch-all for flexible working.

Simple in theory, complex in practice. With fragmented data and no consistent view of cost per outcomes, the governance of this model becomes messier than you might think.

As a one-size-fits-all, these stipends can often lead to a breakdown in regional organizational identity - a global coworking provider can erase distinct local cultures that might otherwise be amplified. Employees want more localized and culturally relevant workplaces. Many don't mind working from a generic space occasionally, but not for their weekly collaboration sessions or team meetings.

Whilst stipends might appear to create flexibility, they actually create more chaos - without the ability to spot demand clusters, the risk of vendor sprawl, and a data black hole. They aren't a real estate strategy - they're a sticking plaster over an absence of strategy at all.

5. The landlord problem

If that wasn't enough, real estate leads also have a tricky stakeholder to deal with: traditional office owners that quickly become a structural barrier for modern real estate strategies.

Many owners still rely on long-term paper leases, demand multi-year commitments regardless of utilization, treat vacancy as 'someone else's issue' as long as they receive their rent and still use outdated building management systems that lack the data insights tenants need.

Businesses want flexibility, short cycles, and quick feedback. All too often, what they get is nothing more than the keys and a 10-year lease. There's a glaring gap here.

This can lead to mispriced leases based on square footage rather than actual use, inflexible commitments that ignore the reality of today's hybrid environment and the curse of the 'ghost floor' - that leaders pay for but employees don't even use. In fact, the U.S. office vacancy rate just hit a near record high of 14%.

As other sectors move to an outcome-based, cloud-first model that puts customers at the centre of their offering and takes advantage of AI and automation, commercial real estate is the last immovable, pre-digital cost center.

These seismic shifts mean that traditional real estate metrics are now dangerously misleading. They ignore how people actually work, where they cluster, and what kinds of spaces they value. So what are successful hybrid brands using now?

Introducing the Utilization Telemetry Revolution

Many companies are still measuring the utilization of their spaces with the number of turnstile uses at their HQ, the number of badge swipes or the number of desks booked through a coworking app.

This shows whether these employees showed up for work, but not whether they stayed all day or just for 45 minutes, whether they worked alone or with 6 others in a brainstorming session, whether they mostly took advantage of a phone booth or a common space, whether this was part of a weekly pattern of office attendance or a random visit as part of a work trip.

Traditional metrics like "rent per square foot" or "rent per FTE" are no longer an effective way of measuring portfolio effectiveness. These are really just an output metric that helps you assess what you're spending, not what you get for that spend.

But successful hybrid firms are moving to a new model. It's what we're calling the Utilization Telemetry Revolution - giving rise to a new generation of global utilization benchmarks.

These might be spatial (including which spaces within the office saw the greatest footfall), qualitative (including structured feedback on the number of breakout rooms for instance), relational (including how many collaboration sessions took place each month where employees worked together in a space), or time-based (not just whether teams came to the office, but how long they worked there, down to the minute).

Once you have access to this kind of telemetry, real estate leads can actually answer the questions that historic rent metrics could never cover:

• Which locations might be over or under-provisioned? Are there some offices where workers fight for their space on a Monday, and others that lie largely empty on certain days of the week?

• Where are natural hubs of employees forming, and for what kinds of work? Are employees self organizing in their local regional hub and is there a pattern to their gatherings?

• How does utilization of space vary amongst different teams? Are R&D teams more solitary whilst sales teams get real value from meeting in person?

• Are spaces so valuable to some members of the team that they actually bring colleagues with them to work there?

The telemetry layer - a live, data-rich map of how work actually happens across the organization - could be your greatest asset as you build your portfolio into 2026 and beyond. Why? Because it unlocks a future of evidence-based leasing rather than relying on outdated assumptions.

Pay for outcomes not space: what successful real estate leaders are doing to excel

At Croissant, we talk to real estate leads every day. And we've noticed a common denominator of those that are winning in the hybrid landscape. They treat their workspace portfolios like cloud infrastructure.

Let's unpack that: no one buys a huge data center for each engineering team these days. They buy capacity from a cloud provider according to their needs, and as a result they access a rich telemetry of cost per query, storage and CPU usage. People pay for what they use, evaluate the data and constantly adjust.

Real estate in 2026 should be no different. Real estate leaders must move from 'paying per seat' to 'paying per outcome'. We used to think of a core unit as a lease on a 20,000 square foot office. Now it's 20,000 hours of productive use of a space in alignment with your overarching business objectives.

Take the example of one US insurance company. Their priorities were to boost cross-departmental collaboration and employee retention whilst addressing high overhead costs.

After assessing how their portfolio delivered against these outcomes, it found its largest offices were chronically underused, offering solitary spaces for calls or individual work rather than setting the scene for collaborative sessions or mentoring.

They decided to cut their permanent corporate office portfolio dramatically from $380m to $140m a year. This meant closing two large office spaces to shift around a quarter of its workforce into flex offices and coworking networks.

They moved from paying for a 'one desk per FTE' model, to one where they pay for real outcomes: collaboration underpinned by the capacity to interact as and when needed, convenience underpinned by offices nearer to childcare centres and homes, and positive all-team experiences that drive retention and loyalty, enabled when needed by culturally relevant spaces.

Moving to a cost-per-outcome approach will help some companies realize they don't need an office at all. Others will come to the conclusion that they do need a permanent lease, but of a completely different kind or in a completely different neighborhood where employees nationally meet already.

The actual space isn't the point. The point is that cost-per-outcome drives an insight-led portfolio composition. It makes sure value doesn't leak away in the form of old and under-utilized stock that is simply no longer relevant to how your employees work.

A guide to your new real estate portfolio framework: lease, flex or leave

Ready to grip the Utilization Telemetry Revolution? Here's your step by step guide to building a real estate strategy for 2026 that's fit for the future of hybrid work.

Step 1: Bake in your telemetry layer

Make sure you have a way of measuring not just whether spaces are being used, but how they are being used. This should include some satisfaction metrics such as whether employees repeatedly visit the same space in a regular rhythm and whether workers bring in other employees to work together. Your telemetry layer must include a way of measuring collaboration through the number of multi-person sessions or meeting room hours used, and detecting trends in geographic clustering (eg. which neighborhoods organically become natural hubs), and to-the-minute time-based usage statistics.

A co-working partner like Croissant can provide granular reporting against each of these metrics to give you the evidence and insight you need to update your real estate approach for the hybrid age.

Step 2: Build a scoring model

For each location, office, co-working space or node, build a scorecard, and rate its performance on a 1-5 scale against key real estate objectives.

These could include: the utilization intensity (including collaboration velocity and hours per employee), experience and cultural fit (whether local spaces reflect the culture around them, and embody your organizational values), in-person strategic benefits (number of client meetings, leadership presence, cross-team interaction), cost per utilized hour (a picture of rent, membership and service costs against the actual hours of use), access to critical talent (whether it is used immediately by new starters or recognized as an attraction) and each space's growth trajectory (whether employee usage is rising or likely to drop in future).

These can then be weighed against your overall hybrid work policy to give you a quantitative picture of how well your real estate decision-making serves your holistic trajectory as a company.

Step 3: Lease, flex or leave

At this stage, real estate leads face a simple choice: lease, flex or leave.

Based on your unique scorecard, you might choose to lease by investing in a hub, whether that's a flagship HQ or regional satellite space. However, any lease must be managed not like a sunken cost but as a piece of infrastructure, with constant engagement with its telemetry to ensure the cost-per-outcome remains high.

Alternatively, you might choose to flex using co-working spaces, serviced short term offices, or on-demand collaborative spaces. This might work best for highly distributed talent, or when an organization's future growth is uncertain. In this case, it's recommended to curate a multi-provider network that doesn't just rely on global brands, so local cultural nuance isn't lost. After 6 months, you can start to access utilization metrics to decide whether a more permanent hub might function better.

Finally, you might decide to leave by choosing not to renew leases in marginal markets, or where cost per utilized hour or per collaborative event is low. The budget saved can then be re-invested into other higher-scoring hubs or office spaces where employee satisfaction signals are more certain, for instance when employees repeatedly bring new colleagues to the space. Others might choose to leave by going fully remote, but utilizing flexible spaces for specific corporate gatherings like quarterly planning, sales training or mentoring sessions.

Step 4: Review monthly, not annually

The final step is to re-establish the rhythm of your portfolio composition. This shouldn't be a one-every-five year executive review. Your new utilization telemetry should be reviewed every month as a minimum, not just by an office manager, but by People, Finance and Real Estate leaders all at the same table. This allows you to constantly optimize a hybrid and adaptable portfolio based on real insight rather than assumption or pure hope.

In such a rapidly changing work environment, no portfolio is ever perfect. But by following this simple guide and marrying lease data with live telemetry utilization data, you can make sure your portfolio is outcome-priced, adaptable, and tailored to your employees rather than your imagination - as close to perfect as it gets.

One thing is for certain: traditional CRE metrics like rent per employee, square footage per head, lease cost, are obsolete in a distributed workforce era. It's time to ditch the pre-pandemic playbook that assumes in-office baselines which are a thing of the past, and replace them with indicators of productivity, engagement and cultural health.

Get in touch today to explore how Croissant can help transform your real estate strategy with utilization telemetry.