Expect more companies to look to reduce their physical footprint in the coming years as their leases come up for renewal and they consider ways to better meet the needs of their employees and customers — and save money in the long run.

Longer-term leases signed in 2016, 2017 or 2018 will expire, and those companies, if they haven’t already, will begin planning that could result in them “right-sizing” their space. The largest number of movers will likely migrate from 50,000 square feet or more to small 10,000-square-foot to 20,000-square-foot spaces, said TJ Jacobs, a broker with CBRE who specializes in office space leases.

More than half of office users are trying to identify ways to reduce space, he said.

One company that right-sized was Two Rivers Marketing, which moved into its new space at 430 E. Grand Ave. in July 2025, after relocating from its former space in a larger building a few blocks away at 106 E. Locust St. It was a move that shrank the agency’s office space by more than half while increasing space for collaboration and adding conference rooms in the process.

Many companies face similar decisions as they strive to meet employees’ needs in the new hybrid work environment that followed the COVID-19 pandemic.

Two Rivers Marketing moved into its new two-story offices last summer. The building, in Des  Moines’ East Village, is about 22,000 square feet, compared to 50,000 square feet in its former space, a former warehouse where the company had been located since 2006.

“We made the strategic decision two years ago to really look at our office,” said Brad Olson, Two Rivers Marketing president, shortly after the agency made the move.

That decision led to the sale of its former building to Opportunity Education, and to lease space in the 125-year-old building that once housed a textile company, a glass studio, an auto parts distribution store and later an office of Iowa Workforce Development.

“It was empty for a while when we came in and made it ours,” Olson said. 

Like many white collar companies, Two Rivers went fully remote during the early days of the COVID-19 pandemic. But it was in 2021 when they realized they would never need all the space they had in their office.

Olson said there were a couple of factors that went into the decision.

The first was the transformation over the years from paper to digital, requiring less physical space for files and storage. And then the company embraced remote and hybrid work, he said.

Olson said 20% of the company’s 115 employees are remote. The rest work a hybrid schedule.

“So all those things combined just made us really move down this road, that we could have a much smaller, more efficient space,” he said. “And it hasn’t felt like we’ve given up any space. It’s kind of remarkable, really.”

Olson acknowledges that he struggled through the design phase of the renovation, and how to cut space in half without it making it feel like it.

But with the transformation complete, the Two Rivers office features 17 conference rooms, five more than it had in its previous location. Each room is equipped with technology to hold virtual meetings. There is improved soundproofing and lighting. A modern kitchen and space for team meetings is also available.

Each conference room carries the name of an East Village street or of a part of the company’s history, such as the names of the first two buildings it occupied. For example, conference rooms are named after Grand Avenue, Locust Street and Walnut Street. Then there are the Teachout and Hohberger conference rooms in recognition of buildings where Two Rivers was located after the company launched in 2000. 

“We wanted to pull some of that East Village vibe into our naming, too,” Olson said. 

There are 15 casual, collaborative drop-in meeting spaces, which Olson said is significantly more than they had previously. The new office also has 82 individual workstations, 32 on the first floor and 50 on the second floor, in department “neighborhoods” where employees can choose to work. Each neighborhood is an open concept, allowing for greater collaboration among staff.

Olson credited the partnership with Substance Architecture, which helped guide Two Rivers Marketing through the design process, with the final result.

Todd Garner, principal with Substance Architecture, said it’s important to help a client prioritize what matters to them when right-sizing their office space.

“Just sitting down and having those conversations about what’s important and showing realistic renderings of what the space could look like early in the design process can really get a client thinking about it,” he said. “And these guys thought about it hard. We went back and forth quite a bit about furniture, arrangements and conference rooms.”

He said the old-school design method of using metrics of so many square feet per person and workstations of a certain size doesn’t work any more.

“There’s no one-size-fits-all anymore,” Garner said. “It’s really about the culture of the office or a company or business trying to achieve a culture and what’s going to help them do that? Luckily, for these guys, they had that culture. They could clearly state, this is kind of what we’re after. Then we walked into the space and originally it was like, ‘Oh, boy. How do we make this into something?’”

And that something was to “embrace the history and the original architecture all while bringing modern, convenient, innovative elements that will take us into the future,” Olson said.

That included using as much of the original building as it could, including the timber columns, exposed brick walls and windows that allow natural lighting to permeate through much of the building. A new staircase was built to match the original wood.

Maintaining the historical integrity of the building was critical, Olson said.

“It was a number one priority,” he said. “We think it matched our culture. We didn’t just want to move into a new, clean, generic space. We wanted it to be uniquely ours.”

The open concept and added amenities have drawn positive comments from employees, Olson said.

“I hear all the time, ‘This is really spacious,’” he said.

Jacobs, who represented Two Rivers Marketing in their move, said he anticipates more companies making similar decisions in the coming years as they continue to settle into hybrid work cultures that have become popular since the pandemic.

“Whether you’re 12 months or 24 months out [from a lease expiring] you’re starting to look,” he said. “It forces the issue that either I stay in place but we need less space or we’re going to take this opportunity to relocate and right-size and by the way, the powers that be, they’re going to love this because we’re going to find a smaller space, it’s going to be nice and we’re going to save a little money in the process.

“I think we’ve definitely seen that shift and we’ll continue to do it,” Jacobs said.

He also believes there is available space in the Des Moines market for companies to downsize, although maybe less than a few years ago.

“As you look at vacancy rates a lot of those vacancies are accounted for in the Class B level space,” Jacobs said. “There are less opportunities in the Class A level to go down in size, but improve location or type of building, so that puts a little pressure on costs.”

He said those 5,000- to 10,000-square-foot spaces have seen the most leasing activity in recent years, which is making it more difficult for companies looking to right-size to find space, but opportunities still exist.

“It makes it more challenging to think about relocating and right-sizing when there’s not a lot of options out there,” Jacobs said.

Another question that companies looking to downsize must consider is construction costs, he said.

Is a company looking for a turn-key operation with minimal improvements but higher rent, or are they willing to put more money into improvements in exchange for a lower lease rent?

“Some landlords love to provide a full turn-key and charge the rent as long as they feel comfortable with the credit of the customer. Then, there’s others who want to give you a sweetheart deal but you’re going to have to bring all the cash to improve it,” Jacobs said. “On the back end, as a landlord, that’s great because you have this tenant that has this vested interest in the space and they’re probably going to stay here a long time because they’re going to invest all this money into it.”

What lessons can a company learn in the right-sizing process?

“You have to have a really good design and construction team because they do it every day,” said Two Rivers Marketing’s Olson. “I think having clear expectations on the vision early on was important and really just being open minded.”

Two Rivers also worked with Hansen Co. and Pigott in the construction and furnishing of their new office.

Braxton Lewis, project manager for Hansen, said the key to right-sizing an office is setting expectations.

“When Substance was brought on they set expectations, and so when we were brought on we set expectations as well. And so did Two Rivers for both of us. They set their own expectations,” he said. “When you have a team that’s all on the same page very early on about how fast it needs to be, what the budget is and what the path is to get there, it makes it an easy process from there on out.”

Another element that made the project flow well was everyone working collaboratively, at the same time, to achieve the same goals, Lewis said.

He said while Hansen was budgeting, Substance Architecture was working on architectural design and Pigott was working on spatial design. From start to finish, the demolition and construction took about seven months, Lewis said.

“There were a lot of moving balls,” Lewis said. “That’s more of a linear process, so that’s how we overcame those challenges of downsizing a little bit.”

The move also meant Two Rivers went from being a building owner to a tenant with a long-term lease. Olson said it’s important to find a landlord who is open-minded and flexible.

“There’s a bunch of trade-offs there, but I would encourage those open, collaborative conversations early with the landlord to get what you need,” he said. “There’s a win-win there because the building owners want to occupy space.”

According to the Polk County Assessor’s website, the building is owned by Nelson Development 10 LLC, which purchased it from George Granseth in 2003.

Jacobs said moves such as those made by Two Rivers Marketing take time and collaboration to become reality.

“A lot of these decisions are made 12, 24, 36 months ago,” he said. “It starts with an initial assessment and review of existing space and then you go diving into options and relocation alternatives. That all takes a significant amount of time and it takes a lot of coordination to get accomplished. Nothing happens overnight.” 

Two Rivers’ move allowed the company to stay in the vibrant, pedestrian-friendly East Village.

“We love being downtown,” Olson said. “We have associates who live downtown. We host clients, many of whom are from out of town, and we want them to have a good experience, and have the vibe of downtown, good restaurants, good hotel options, and we have that in the East Village.”