May 2025
Leesman Research & Insights Team
Post-pandemic, and the shift towards hybrid working has forced organisations to reassess workspace strategies.
Work environments have restructured, and a number of organisations are still actively focused on consolidating space and optimising portfolios.
In Leesman’s latest report, Focus Forward, based on the results of the 2025 Corporate Real Estate (CRE) poll, we explored the changes in property footprints over the past 18 months, while also asking about expected adjustments for the coming year-and-a-half.
A new trend is emerging
A significant 68% of respondents reported having completed some level of reduction in real estate footprint over the past 18 months. But that drops sharply to 49% for the upcoming period. Delving deeper into the extent of these proposed reductions, 11% said it would be ‘considerable’. But far more, 38%, said it would be ‘minor’. In comparison, 21% reported having already performed ‘considerable’ reductions and 45% said they had made ‘minor’ cuts in the previous 18 months.
This marks a shift in recent trends. Leesman has been surveying CRE leaders every year since 2021, and every year respondents have confirmed they planned to downsize real estate portfolios. In the first ever poll, published amid the turmoil of the pandemic, well over two thirds – 71% – said they planned to downsize their footprint in the next 18 months.
Downsizing has remained a constant theme ever since: every year, at least 60% of respondents said they would be reducing their footprint in the next 18 months. In 2024, the figure was 67%; within that, 2% said it would be a ‘major’ reduction, 24% said it would be between 25% and 50%, and the biggest group, 41%, said it would be ‘minor’.
Fast forward just one year, however, and while 68% confirm they did indeed reduce their footprint over the last 18 months, just 49% still have plans to downsize, the lowest figure since the poll begun.
So, while the numbers suggest that downsizing will continue, they also indicate this major post-pandemic trend is finally slowing.
Indeed, some organisations reported they had concluded right-sizing their portfolios – a finding further supported by 33% of respondents saying their real estate footprint would remain the same in the coming months.
Disposal strategies vary
In total, 74% of respondents report that their organisations have either already downsized, are planning to or both. It shows just how drastic the decrease in office space demand has been.
But to gain further insights into how organisations are refining their real estate portfolios, we asked respondents who plan to downsize some follow-up questions.
The majority are strategically streamlining portfolios through targeted lease management and disposal strategies. A significant 63% reported they would use the opportunity not to renew expiring leases as a way of reducing their footprint.
Other disposal strategies include subleasing or assigning leases, with 60% using these approaches to minimise financial losses on unused spaces. This method allows CRE leaders to adapt swiftly to changing demands while avoiding the long-term burdens associated with vacant real estate.
Similarly, 55% of those questioned intend to actively surrender leases where possible, effectively decreasing their commitments to underutilised properties.
While direct sales of assets are less common, they represent a noteworthy strategy for those who have real estate on their balance sheet and are looking to permanently reduce their holdings. About 26% were considering selling entire buildings, reflecting a more significant step away from large, fixed real estate investments. Around 11% were exploring sale-and-leaseback options to convert owned assets into capital while still maintaining occupancy.
But quality remains key
One thing was clear though: quality matters, regardless of the chosen reduction method.
A smaller CRE portfolio does not mean the office is losing value; instead, it often represents a strategic reduction in costs alongside moves to enhance the quality of retained offices and improve employee experience overall.
Indeed, the findings of the 2025 CRE poll show that the quality of the workplace plays a significant role in decisions about which spaces to retain and which to let go of. A total of 62% of respondents indicated they consider the quality of the space ‘considerably’ or ‘significantly’ in their decision-making process. Just 16% said quality impacts their decisions ‘slightly’ or ‘not at all’.
Accordingly, many respondents emphasised their forward-looking goals. For example, one said how important it was to “create a great workplace experience while balancing costs”, while another noted that increasing employee experience, “while being more efficient with our footprint”, was key.
In other words, organisations may be aiming to reduce overall costs by reducing their CRE – but they also want to ensure greater efficiency in footprint management by enhancing the quality of their workplaces and, in turn, employee experience.
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By combining exclusive poll results with our workplace experience data, our latest report gives a comprehensive view of the evolving landscape, helping leaders navigate the challenges and opportunities ahead.
