In a time of cost optimization, the financial services industry is paying a high price for empty desks, not just in square footage but in overall profitability in a high-cost real estate market. A recent study by JLL found that nearly 50% of office space in major financial hubs like New York and London remains underutilized. As flexible and hybrid models become the norm, firms must rethink their approach to the physical footprint of their office space.
Office space is often the second largest expense after salaries for financial services firms. In markets like New York City, prime office spaces average between $70-$100 per square foot annually, with Class A buildings topping $120 per square foot according to Cushman & Wakefield (Cushman & Wakefield, Q4 2023 MarketBeat). To give some perspective, that is $7M-$12M annually for a 100,000 square foot office for something that resembles more like a barren graveyard than a bustling metropolis.
The base lease cost is not the only expense that comes along with leasing commercial property; property taxes, utilities, insurance, security, maintenance, and total occupancy costs also need to be considered as they can increase total monthly operating costs by 50-70% (CBRE 2023 Global Office Occupier Sentiment Survey). According to JLL, reducing office footprints by 20% can generate 12-15% savings across total occupancy costs, savings that could be reallocated to high-impact investments like digital transformation, employee development, or client innovation (JLL, 2024).
Underutilized space isn’t just costly – its often inefficient and hampers employee experience. According to the Gensler 2024 U.S. Workplace Survey, 82% of employees report barriers to collaboration, largely due to outdated workplace design and inconsistent attendance models (Gensler, 2024). In a time when 71% of employees indicate they want to be in office at least one day a week, up from 41% in 2021, firms need to take special attention to their office layouts to ensure they foster collaboration, productivity, and employee satisfaction. A well-designed workspace can make the office a destination rather than an obligation, enhancing engagement and maximizing the benefits of in-person work (Cushman Wakefield, 2025).
Further supporting this, 85% of financial services employees believe their companies could improve their in-office experience, a strong signal that companies must rethink how their spaces support employees, not just house them (PwC US Remote Work Survey, 2023). While offices currently sit empty in many cases, the employees who do come into the office often feel isolated, uninspired, and unmotivated. Firms need to approach their spaces with shared space, energy, collaboration zones, employee satisfaction, and retention in mind.
Strategies to Optimize Office Space
- Rethink Your Space Strategy: How does your team work—remote, hybrid, in-office? Align your space design accordingly. Shared workstations, collaboration zones, and multi-purpose rooms are replacing traditional office layouts (CBRE, 2023).
- Leverage Subleasing Opportunities: Offload unused space to reduce overhead while maintaining flexibility to scale up. Subleasing in NYC is surging, with more than 25% available space now sublet inventory (Savills, Q1 2024 NYC Office Market Report).
- Negotiate Smarter Leases: Commercial leases average 3–5 years. Negotiate shorter terms, flex clauses, or reduction options that allow for real-time adjustments (NAIOP, 2023).
- Invest in Better Workplace Tech: Only 26% of employees are satisfied with their current digital work tools, revealing a major gap in digital readiness (Gartner, 2023 Digital Worker Experience Survey).
- Implement Workplace Management: Workplace management technology is taking off across sectors because it delivers real-time insights into office usage, seat booking trends, employee preferences, and collaboration patterns. These tools help firms make data-driven decisions, optimize real estate, and align office design with how people actually work—resulting in reduced costs and higher engagement.
The cost of empty offices has become too high to simply ignore. For financial services firms, underutilized office space represents millions of dollars in lost profits. As the hybrid work model becomes the new norm, it is time for commercial real estate strategies to catch up to the changing times. With the right data and tools in place, firms can reduce their overhead, enhance collaboration, and make their spaces not just a cost center, but a competitive advantage.
