If you're running a growing business with 25 employees, there's a good chance you've asked yourself a simple but important question:
How much office space do we actually need?
Whether you're approaching a lease renewal, considering a relocation, or exploring the possibility of purchasing your own building, determining the right amount of office space can have a significant impact on your company's finances, culture, and long-term growth potential.
Unfortunately, there isn't a one-size-fits-all answer.
A 25-person accounting firm operates differently than a 25-person technology company. A law firm will have different space requirements than a marketing agency. Some businesses have embraced hybrid work arrangements vs 5-day attendance mandates; private offices vs open concept vs 50/50 mix. The reality is that office space planning has changed dramatically over the past several years. Business owners who understand today's workplace trends are often able to reduce occupancy costs while creating a better environment for employees and future employee growth.
The Traditional Rule of Thumb May No Longer Apply
For many years, commercial real estate professionals often used a benchmark of approximately 250 to 330 square feet per employee when estimating office space requirements.
At the time, that made sense for many industries.
Most offices contain large executive offices, extensive file storage, expansive conference rooms, IT rooms and dedicated workstations for every employee.
Today's workplace may look very different.
Technology has significantly reduced the need for physical storage & IT rooms. Cloud-based software has replaced file rooms. Many companies have adopted more collaborative office layouts. Hybrid work schedules have changed how often employees occupy the office and a dedicated workstation.
As a result, many businesses now operate effectively with significantly less space than they needed a decade ago.
For most professional service companies today, office requirements typically range between 150 and 250 square feet per employee when common areas are included.
Using those benchmarks, a 25-person company may require anywhere from approximately 3,750 square feet to 6,250 square feet. Businesses with larger private offices, training facilities, or significant growth plans will require additional space.
The key takeaway is that employees count alone should not determine your office size. Other limiting factors include availability of parking on-site (if employee base does not use public transportation) and building’s common area infrastructure...e.g. size of common area restrooms on the floor tenant occupies.
What Does a Typical 25-Person Office Require?
Let's look at a common example.
A growing Denver-based professional services company with 25 employees may have two executive offices, several management offices, employee workstations, a conference room, a smaller huddle room, reception area, break room, storage space, and support areas for printing and technology equipment.
When all of these functions are considered together (plus common area factor which includes building lobby, common area hallways, stairwells, restrooms, shared conference room, shared gym space, shared tenant lounge), many companies find themselves in the rentable square foot range noted above.
That often provides enough room for current operations while maintaining flexibility for future growth.
However, the actual requirement depends heavily on how employees use the space.
Some organizations prioritize collaboration and open workstations. Others place greater emphasis on privacy, confidentiality, client meetings, and dedicated offices.
The right answer depends on the unique needs of the business.
Why Growth Plans Matter More Than Current Headcount
One of the biggest mistakes business owners make is focusing exclusively on today's employee count.
If your company currently employs 25 people but has implemented a strategic initiative to add five or ten employees over the next few years, your space needs may be significantly different than they appear today.
Many successful business owners have ambitious growth goals. They are focused on increasing revenue, hiring top talent, expanding service offerings, and entering new markets while maintaining a centralized HQ. Commercial real estate decisions should support those objectives rather than create obstacles. Growing businesses often need a real estate strategy that accommodates future expansion while maintaining cost efficiency.
A lease signed today may remain in place for five, seven, or even ten years.
The office that works perfectly today could become a constraint much sooner than expected if future growth isn't considered during the planning process.
At the same time, leasing significantly more space than necessary can create unnecessary occupancy costs that impact profitability.
Finding the right balance is critical and incorporating lease clauses such as Right of First Refusal (ROFR), Right of First Offer (ROFO), Expansion Option, Relocation Option as well as Termination Option if needed space growth cannot be achieved in current building.
The Impact of Hybrid Work
Another major factor affecting office space requirements is hybrid work.
In the past few years, business owners have seen diminished employee productivity resulting in companies requiring employees to be in the office every day aka Return to Office (RTO). Others continue to utilize post-2020 schedules that allow employees to work remotely throughout the week...but these employers are becoming fewer when company culture, accountability, time management, superior-to-subordinate learning and peer-to-peer learning are a priority for business owners.
This shift has fundamentally changed how many organizations think about office space.
A company with 25 employees that operate on a hybrid schedule may not need the same footprint as a company where all 25 employees are present every day.
However, reducing office space should not become the primary objective.
Many businesses have discovered that collaboration, training, mentorship, and company culture can suffer when office footprints become too small.
The goal should be to create an environment that supports productivity, teamwork, employee engagement, and future growth.
Office space should serve the business strategy, not dictate it.
Private Offices Versus Open Layouts
Office design has a significant impact on overall square footage requirements.
Private offices consume more space than open workstations. Conference rooms require more square footage than collaborative seating areas. Employee amenities require additional room beyond individual workstations.
A law firm with multiple attorneys may require significantly more space than a consulting firm utilizing open workstations.
Likewise, a wealth management company that hosts frequent client meetings will prioritize conference facilities that another business rarely uses.
This is why the most effective office planning begins with understanding how employees work rather than simply calculating square footage per employee.
Every business operates differently.
The office should reflect those operational realities.
Shared Areas Are Often Overlooked
When estimating office space needs, many business owners focus exclusively on employee workstations and offices.
What often gets overlooked are the shared spaces that support daily operations and employee satisfaction.
Conference rooms, break rooms, reception areas, hallways, storage areas, copy rooms, wellness rooms, and collaborative workspaces all consume valuable square footage.
In many office environments, these shared areas account for a substantial portion of the overall footprint. Cramming employees into a highly efficient but claustrophobic environment may initially look good for the bottomline but it can harm morale, employee retention and ultimately productivity.
As a result, a company that initially believes it needs only 3,000 square feet may ultimately discover that 4,500 square feet is necessary to support normal business operations comfortably.
This is one reason why professional space planning can be extremely valuable as business owners are evaluating their top 3 – 5 office options.
How Office Space Affects Recruiting and Retention
Commercial real estate is no longer simply about putting employees at desks.
Today's office environment plays a meaningful role in employee recruitment and retention. This is demonstrated when you look at the 2026 occupancy rate (% leased) of modern, Class A office vs pre-2000 Class B & Class C office buildings.
Many business owners continue to face challenges related to attracting qualified employees and building strong workplace cultures. The quality of the office environment often influences how employees perceive the organization and their long-term future with the company.
Prospective employees notice factors such as location, office conditions, meeting spaces, natural light, accessibility, and overall workplace experience.
An office that feels outdated or overcrowded may negatively impact morale.
Conversely, a well-designed workplace can help reinforce company culture, improve employee satisfaction, and support productivity.
The best office environments balance efficiency, functionality, comfort and amenities.
How Fountainhead Commercial Helps Business Owners Determine the Right Office Size
One of the biggest misconceptions in commercial real estate is that the process begins by touring available properties.
It starts with developing a strategy.
Before evaluating specific buildings, Fountainhead Commercial works with business owners to understand how their company operates today and where they expect the business to be several years from now.
That process always includes discussions about employee growth, workplace design, hybrid work policies, future hiring plans, operational requirements, financial objectives, and occupancy costs budget. Considering what the primary competition is doing can be insightful...since you are likely trying to recruit and retain the same talent.
Many business owners are experts at running their companies but understandably do not spend their time analyzing office layouts, lease structures, market conditions, and negotiation strategies. Fountainhead Commercial serves as an advisor throughout the process, helping clients make informed decisions while remaining focused on growing their businesses. Providing expert guidance, financial analysis, negotiation expertise, site selection , and professional transaction management only by 25-year real estate veterans (No, we don’t delegate any critical functions to junior associates like every large brokerage firm) is a core part of Fountainhead Commercial's service offering.
For a 25-person company, choosing the wrong amount of office space can result in years of unnecessary costs or operational inefficiencies.
The objective is not simply finding available space.
The objective is to find the right space.
Leasing Versus Buying
Once a company reaches approximately 25 employees, another question frequently arises.
Should the business continue leasing or begin exploring building ownership opportunities?
The answer depends on numerous factors, including company profitability, available capital, employee growth projections, then-current financing terms, and long-term business objectives.
Many business owners eventually grow frustrated with paying rent and begin evaluating whether owning a building could help build long-term wealth while providing occupancy stability. For some businesses, purchasing an owner-user office building may be worth exploring as part of a broader real estate and wealth-creation strategy.
Every situation is different.
A detailed lease-versus-purchase analysis can help determine which option best aligns with the company's financial goals.
Final Thoughts
Occupancy cost (i.e. Total cost of leasing or owning a building) is usually one of the largest expenses a business will incur outside of payroll.
Choosing wisely might make or break the long-term success of your business.
At Fountainhead Commercial, we help Denver-area business owners evaluate lease renewals, relocations, expansions, and owner-user purchase opportunities. Our goal is to help clients identify the appropriate amount of space, negotiate favorable terms, and make informed real estate decisions that align with their long-term business objectives. We handle the complexities of the commercial real estate process so business owners can remain focused on running and growing their companies.
