They were paying for the whole floor and using two thirds of it

Girish Songirkar won the rent argument and then found out it was the wrong argument. The landlord opened at a 12 percent increase. Twenty years of tenancy and a longer commitment brought it down to 7. Songirkar reports that the saving mattered less than what the exercise revealed, which was that the firm pays for an entire floor plate and rarely uses more than two thirds of it.

Money & World asked business owners, founders, operations managers and freelancers what they pay for premises, what the landlord asked for at renewal, what they agreed in the end, and how much of the space they actually use. Twenty two people answered. Three of them measured themselves and gave a number.

The three numbers land in a narrow band, and the band sits just above the line at which the federal government now starts taking buildings away from its own agencies.

The renewal is no longer about the rate

Answer: Girish Songirkar says a 12 percent rent demand was negotiated to 7 percent, and that the more consequential finding was that peak daily utilization of the space rarely exceeds 65 percent of what the firm pays for.

Songirkar is delivery manager for enterprise software engineering at ArionERP.

"Commercial lease renewals are no longer a simple negotiation of price per square foot; they are a battle over the utility of legacy footprints. During our last major renewal for our global delivery operations, we faced an initial demand for a 12% rent increase based on local market recovery. We successfully negotiated that down to 7% by leveraging our 20-year history as a stable anchor tenant and extending our commitment term."

Then the part that was not on the table.

"However, the financial victory was secondary to the realization that our actual space usage had decoupled from our square footage. We currently pay for 100% of a floor plate where peak daily utilization rarely exceeds 65%."

Songirkar is specific about where the mistake was made, and it was made at the previous signing rather than at this renewal.

"Our mistake during the previous signing was maintaining a 1:1 desk-to-employee ratio, assuming a full-scale return to traditional office routines. We over-allocated for fixed seating when the operational need had shifted toward high-density collaboration zones for sprint planning and architectural reviews. Consequently, we are paying for 35% "dead space" that serves only as expensive overflow."

Five points of rent increase is a number a tenant can argue about. Thirty five percent of the floor is a number a tenant can only argue about once, at signing, and then lives with for the term.

The gap is measurable, and the people carrying it measure it

Answer: David Karmiryan says roughly 70 to 75 percent of the leased space is in consistent use, with the remainder useful mainly during larger inventory arrivals and seasonal peaks, and that carrying 25 to 30 percent underused month after month changes the economics of the lease.

Karmiryan owns HuskeeWholesale, which supplies reusable coffee cups to cafes and retailers, so the space in question holds stock rather than desks. The shape of the error is the same.

"The biggest thing I got wrong about leasing business space was assuming that the amount of space we signed for would match what we actually needed a few years later. We currently use roughly 70-75% of our space consistently, with the remainder becoming useful mainly during larger inventory arrivals and seasonal demand."

That extra capacity was bought deliberately, which is what makes it hard to see as a loss.

"At the time we signed, that extra capacity felt like sensible room for growth, but carrying 25-30% of underused space month after month changes the economics considerably. I've seen this firsthand as our business and inventory needs have evolved: the space that looks essential during a busy period can feel excessive six months later."

Karmiryan draws a conclusion about how the calculation should have been done.

"If I were making the same decision today, I would calculate space requirements around normal operating volume rather than peak volume and build flexibility into the lease wherever possible. Paying slightly more per square foot for a space you can use efficiently can ultimately be cheaper than committing to thousands of dollars a year for square footage that mostly sits empty."

Two tenants, two different uses, and a reported utilization of 65 and of 70 to 75 percent. Neither is a survey. What makes them worth setting side by side is that a third party has now published the number it considers acceptable, and it is lower than both.

The document: Congress wrote down how much space a person needs

Answer: Section 2302 of the Thomas R. Carper Water Resources Development Act of 2024 sets a federal utilization benchmark of 150 usable square feet per person, requires average building utilization of at least 60 percent over each one year period, and requires federal occupancy agreements to carry a procedure for handing space back below that line.

Public Law 118-272 was enacted on 4 January 2025. It is a rivers and harbours bill, and section 2302 of it is the Utilizing Space Efficiently and Improving Technologies Act, which has nothing to do with water and everything to do with the question these three tenants were answering.

The Act defines the terms rather than gesturing at them. Building utilization means "the percentage of utilization generated by comparing the actual utilization rate with the capacity based on a utilization benchmark of 150 useable square feet per person." Capacity is the total usable square footage divided by that benchmark. The actual utilization rate is the total usable square footage divided by the occupancy.

The definition that does the most work is occupancy, and it is a strict one:

"the average number of employees actually performing duties in person in a public building or federally-leased space at least 40 hours per week over a 2-month period."

A person in the building three days a week is not occupancy under that definition. Anyone comparing a federal utilization figure with a private badge-swipe average is comparing two different measurements.

Subsection (d) sets the target and attaches a consequence to missing it. The Director of the Office of Management and Budget, in consultation with the GSA Administrator, must ensure building utilization in each public building and federally leased space "is not less than 60 percent on average over each 1-year period," a duty that first attached one year after enactment, which is 4 January 2026. Where a building falls below it, the Administrator must notify the tenant agency of the excess capacity "along with associated costs of such excess," and must notify the House Transportation and Infrastructure Committee, the Senate Environment and Public Works Committee and both Appropriations Committees.

Miss it twice and the space goes. If the tenant agency fails the target again in the next reporting period, the Administrator "shall, in consultation with the Director, take steps to reduce the space of the tenant agency, including consolidating the tenant agency with another agency, selling or disposing of excess capacity space, and adjusting space requirements, as appropriate, for any replacement space."

There are exceptions, and they are the sensible ones: the Director may except non-standard space an agency demonstrates it needs for its mission, naming warehouses, mission-critical laboratories and public customer-facing space.

The clause the private tenants do not have

The part of section 2302 that speaks most directly to Songirkar and Karmiryan is not the benchmark. It is subsection (f), the Federal Use It or Lose It Leases Act, which puts the remedy in the lease.

An occupancy agreement between the GSA Administrator and a federal tenant for office space must include language requiring the tenant "to have written procedures in place governing the return of office space to the Administrator if the occupancy of the Federal tenant falls below a 60 percent space utilization rate for 6 months within any 1-year period."

That is the mechanism. The federal government did not solve its underused-space problem by negotiating harder at renewal. It solved it by refusing to sign an agreement that has no exit for space it stops using, and by requiring the tenant to have written down in advance how the handback happens.

Songirkar and Karmiryan each describe discovering the gap partway through a term and then carrying it. Karmiryan's stated fix is to "build flexibility into the lease wherever possible," which is the same instinct arriving from the other direction, from a tenant with no statute behind it.

None of this binds a private landlord or a private tenant. There is no 150 square foot rule for a commercial lease, no 60 percent floor, and no obligation on any landlord to take space back. The statute is worth reading anyway, because it is the only place where somebody with a large portfolio has written down what utilization figure is unacceptable, and published the arithmetic used to get there.

The only way to close the gap completely

Answer: Nicolas Falourd reports paying nothing in rent because Cyber Techwear holds no lease at all, relying on third party fulfilment and remote staff, so occupied space and paid-for space are the same by construction.

Falourd runs Cyber Techwear, an online clothing retailer, and answered the question by describing the absence of the thing it asked about.

"We do not lease traditional commercial premises for Cyber Techwear -- 0 EUR/month in rent and no landlord renewals; the business relies on third-party fulfillment and remote teams rather than an owned or leased storefront or office."

The consequence is exactly the one the other two are describing in reverse.

"Using third-party warehouses and distributed remote staff means our occupied space equals what we pay for (we only pay for contracted fulfillment volumes), so there's no gap between signed space and actual use."

Falourd is included as the boundary of the problem rather than as an answer to it. Signing for nothing is available to an e-commerce retailer with contracted fulfilment and unavailable to an enterprise software firm running sprint planning in a room, or to a wholesaler receiving pallets. What the answer establishes is that the gap is a property of the commitment, not of the business. It appears the moment you sign for a fixed quantity of space against a variable quantity of use, and the only structures without it are the ones that never signed.

What the benchmark settles and what it does not

It settles the arithmetic. Anyone asking how much office space they need now has a published figure to reason from, 150 usable square feet per person, together with the definition of the person being counted and a stated threshold below which the largest office tenant in the country treats a building as a problem.

It settles nothing about price. No contributor here gave a rent, and none is estimated. A tenant at 65 percent utilization in cheap space may be losing less than a tenant at 85 percent in expensive space, and the statute has nothing to say about that.

What the three answers share is smaller and more useful than a benchmark. All three measured. Two of them measured after signing and found a number they did not like, and the third measured before signing and concluded there was nothing to sign. The renewal conversation Songirkar describes, where the landlord opens on rate and the tenant discovers the real exposure is footprint, only happens to somebody who has counted. The federal government spent an Act of Congress arriving at the same instruction.