Structuring Space for Non-Market Interactions in Corporate Real Estate: A Case Study

The concept of non-market interactions, which is finding increased applicability in areas not traditionally embraced in economics, is often linked to the spatial proximity of voluntary interactants. In urban economics, spatial proximity is often equated with density. The concept of density has found its way by other names into corporate real estate as the costs of office space have increased. Since corporate office space might be considered a classic setting for non-market interactions, how can spatial proximity be analyzed in order to give insight into the problem of close-packing of occupants of office space (density)? This paper proposes that conventional concepts of absolute space employed in economics and real estate are inappropriate for the analysis of the fine-grained spatial proximity that encourages and sustains interaction within office environments. It proposes the alternative concept of relative space, and shows how it is operationalised. This approach is then applied in an evaluation of the before and after configurations a large office space of a well-known international firm. The results show how non-market interactions can be spatially structured, how these spatial structures can be measured and how these measures relate to interaction in the work environment.