It is no secret that leasing office space is expensive, driving a growing number of companies — from financial service firms to law firms — to reduce their office footprint to cut capital expenditures and boost profit margins.

Traditionally, when determining a company’s real estate needs, executives would take the current size of their staff and future growth into account and make an educated guess about the amount of space needed. This approach has often resulted in an overabundance of space and a waste of cash.

CBRE brokers are using a new data analytics tool to help clients determine current and future office real estate needs more precisely, Cre.Tech reports. The firm's predictive lease analysis puts into quantifiable metrics a range of possibilities from future company growth to contraction.

“Our analytics runs through tens of thousands of scenarios where the company is growing and contracting. Then, we test all possible lease solutions against those scenarios and determine which one performs best,” CBRE Senior Managing Director of Integrated Transaction Solution Practice Christelle Bron told Cre.Tech.

Even though this process is tailored specifically for each company, geography and industry, the algorithm overwhelmingly predicts that in most cases, less space is worth more.