Some time ago, I worked with a multinational company that occupied over 4,000 square meters of office space. When it came time to find a new headquarters, anyone would have thought they'd need something similar. No. We ended up looking for around 1,000 square meters.
The company wasn't closing or downsizing its operations in the Dominican Republic. It had adopted a hybrid model, and when it analyzed how many people were actually using the office at any given time, maintaining over 4,000 square meters no longer made sense.
But it also didn't look for a cheaper or lower-end office. Quite the opposite. It moved to a brand-new tower and developed a modern, spectacular headquarters that was much more aligned with its new way of working.
Fewer square meters. Better utilized.
This is part of the downsizing we're seeing among large corporate occupants internationally. CBRE reports that approximately one-third of the companies surveyed expect to reduce their office portfolio over the next three years.
But be careful: not everyone is downsizing.
I'm also working with a company that needed to move out of an older tower. In this case, they weren't looking for less space. They needed more. The existing office required a significant investment to update, and a rather logical question arose: if we're going to invest all that money, do we want to do it here? The answer was no.
They decided to look for a Class A tower, better conditions, and a headquarters that better represented the company and could support its operations for years to come.
One company reduced its square footage. The other increased it.
But both were essentially doing the same thing: reviewing whether the building they occupied still reflected the company they had become. And that seems much more interesting to me than simply talking about downsizing.
Capital expenditure (capex) is also changing the conversation.
When a company receives an unfinished office space, the rent is just the beginning. Then come flooring, ceilings, partitions, lighting, HVAC, electricity, data, furniture, meeting rooms, a kitchen, technology… And that's when the spreadsheet starts to get interesting. 😂
That's why I'm seeing models that we used to encounter less frequently. For example, I'm currently working with an alternative where a third party takes over the space, makes practically all the fit-out investment, and then subleases it back to the company under a structure that incorporates that investment into the contractual cost.
Is it necessarily cheaper? No. But it can allow a company to preserve capital for its own business, avoid managing a construction project, and receive an office practically ready to operate.
Then the question stops being just: “How much does a square meter cost?” and becomes: “Which real estate structure makes the most sense for this company?”
What I'm seeing in Santo Domingo:
In my recent experience, I'm seeing downsizing mainly in the requirements of multinational corporations. I wouldn't say that Dominican companies are massively downsizing their offices because, quite simply, that's not what I'm seeing.
Multinationals often come with regional or global guidelines on hybrid work, space utilization, technology, sustainability, CAPEX, and budget. And their requirements have also evolved.
We're no longer just talking about square footage and parking. Building quality, location, amenities, employee experience, relationship with the landlord, flexibility, and increasingly, specific standards and certifications all matter.
That's why, when a company tells me it wants to downsize, I no longer immediately assume it wants to spend less. First, I ask: what are you trying to achieve? Because perhaps you need less space. Or perhaps you need more.
The important thing is that it's the right amount of space.
The two companies I mentioned made completely different decisions, but they arrived at the same point: they understood that their previous office no longer met their current operational needs.
And perhaps that's the question many companies should ask themselves before looking for their next headquarters: How much space do I really need, and what's the best way to use it?
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