Last updated October 2026
A hybrid company should right-size its office space by measuring how many people are actually in the office on its busiest days, planning for that peak plus a cushion for growth, and negotiating the smaller footprint 12 to 18 months before the lease expires. Starting that early keeps a move on the table, and a credible move is what gives a tenant leverage with its current landlord. Since 2004, Tenant Advisors has negotiated more than 2,000 office leases for tenants of 3,000 to 30,000 SF across the Chicago suburbs and downtown, and the companies that size first and negotiate second consistently stop paying for desks nobody uses.
Key Takeaways
- Size your next office to your peak in-office day, not your headcount and not your average attendance.
- Start 12 to 18 months before expiration. Inside 9 months, most tenants lose the option to move.
- Every 1,000 SF you don’t need costs roughly $34,000 to $44,000 a year in suburban Class A space.
- A smaller lease still earns concessions: about 1 to 2 months of free rent per year of term in the transactions we track and negotiate.
- Negotiate expansion, contraction, and sublease rights so a smaller footprint doesn’t box you in.
When Should You Start the Sizing Conversation?
Twelve to 18 months before your lease expires. A relocation in the 3,000 to 30,000 SF range typically takes 9 to 12 months once you add search, negotiation, design, permits, and construction. If you start sizing with six months left, your landlord knows you can’t realistically move, and the renewal proposal will reflect it. Starting early lets you price your current building against two or three alternatives at the size you actually need. Our renewal vs. relocation analysis lays those options side by side on total occupancy cost, not just rent.
How Do You Measure What Your Team Actually Uses?
Use real data from a normal stretch of weeks, not a survey of what people say they’ll do. Badge swipes, desk or room booking records, and Wi-Fi connection counts are all reasonable sources. What matters is the shape of the week:
- Peak day attendance. Most hybrid teams cluster on Tuesday through Thursday. Plan for the busiest of those days, because that is when people need a seat.
- Who must have an assigned seat. Finance, operations, and client-facing staff who are in daily usually still need one. Others can share.
- Meeting and collaboration demand. Hybrid offices often need fewer desks but more small rooms. Count how often rooms are booked solid.
- Growth plans for the full term. A 5-year lease should fit the company you expect to be in year three, with rights to add space after that.
Get leadership to agree on the in-office policy before you finalize a number. A policy change six months after you sign is the most common reason a right-sized office turns into a wrong-sized one.
What Does Unused Space Cost in the Chicago Suburbs?
More than most tenants expect, because you pay for it every month of the term. The table below uses gross asking rents in the transactions we track and negotiate to show what 1,000 SF of space you don’t need costs each year.
| Market | Class A rent (gross, per SF/yr) | Class B rent (gross, per SF/yr) | Yearly cost of 1,000 unused SF in Class A |
|---|---|---|---|
| O’Hare | $38 to $43 | $25 to $31 | About $38,000 to $43,000 |
| North Suburbs | $36 to $44 | $24 to $32 | About $36,000 to $44,000 |
| Schaumburg | $34 to $38 | $20 to $24 | About $34,000 to $38,000 |
Rounded ranges from the transactions we track and negotiate as of October 2026. Yearly cost is before annual escalations, which add to the total over a multi-year term.
On a 5-year lease, a 15,000 SF tenant that only needs 11,000 SF is carrying 4,000 extra square feet for 60 months. In O’Hare Class A space, that is roughly $150,000 to $170,000 a year before escalations.
Can Downsizing Still Earn Concessions From Your Landlord?
Yes. Landlords would rather keep a smaller tenant than carry a vacancy, plus the downtime, commissions, and build-out cost of replacing you. In the transactions we track and negotiate, competitive tenants are achieving about 1 to 2 months of free rent per year of lease term, or 5 to 10 months on a 5-year lease, along with an improvement allowance to reconfigure the space. Those concessions shrink with the deal size, but they don’t disappear when you give back space.
The catch is that a landlord’s willingness depends on whether the space you’re returning is leasable. A clean, separately demisable suite or a full floor is easy to give back. A scattered half-floor may need to be swapped for a different suite in the building. Our lease renewal negotiation work starts by figuring out which version of “smaller” your landlord can actually accept.
Should You Shrink in Place or Move?
It depends on what a smaller suite costs at your building compared with the market. Staying avoids moving costs and downtime, and your landlord may fund a reconfiguration. Moving can get you a layout designed for how a hybrid team works, sometimes in a better building at a similar total cost. The only way to know is to price both at the same square footage. If the landlord won’t reduce your space at all, a move or a sublease of the excess space becomes the fallback.
What Lease Rights Protect a Company That Might Grow Back?
Committing to less space is safer when the lease lets you adjust later. The rights worth negotiating include:
- Right of first offer or refusal on adjacent suites, so you can grow without moving.
- Contraction or early termination options at a set point in the term, with the fee spelled out in advance.
- Reasonable sublease and assignment language so the landlord can’t unreasonably withhold consent or recapture profit.
- A renewal option at market so the next decision starts from a position of choice.
These rights cost landlords little to grant at signing and a great deal to win back later. Ask for them while you still have leverage. If your expiration is within the next 18 months, contact us for a lease review and market benchmark. There is no cost to tenants.
Frequently Asked Questions
How many desks does a hybrid team need?
Plan for your busiest in-office day, not total headcount. Count peak-day attendance from badge or booking data, add assigned seats for people who are in daily, add meeting rooms, and leave a modest cushion for growth over the lease term.
When should I start planning a smaller office before my lease expires?
Start 12 to 18 months before expiration. That gives you time to compare your current building with alternatives at the right size, which is what creates leverage in the renewal negotiation.
Will my landlord still offer concessions if I take less space?
Usually, yes. In the transactions we track and negotiate, competitive tenants achieve about 1 to 2 months of free rent per year of term, or 5 to 10 months on a 5-year lease, plus an improvement allowance. Concessions scale with deal size but remain available on smaller renewals.
What if my landlord won’t let me reduce my space at renewal?
Price a relocation at the size you actually need. If moving is not practical, subleasing the excess space can offset the cost. A tenant rep can model both options so you can compare total occupancy cost.
About the authors: Tom Koelzer and Dave Ven Horst co-founded Tenant Advisors in 2004 and have represented only office tenants ever since, never landlords. The firm has negotiated more than 2,000 office leases across the Northwest Suburbs, O’Hare, the East-West Corridor, the North Suburbs, and the Chicago CBD. Questions about your lease? Contact us or call (847) 778-0296.