Good question. If they're only away 1-2 days a week and they retain their own personal office or cubicle, there is no savings on office space. But when they're away more days each week, and/or they are using some kind of shared facilities, that's where the savings begin.

If telecommuting is set up properly, the telecommuters really don't need the same kind of dedicated space in the office as when they worked there full-time. They should be doing their more intensive desk work while telecommuting, and use their time in the office to attend meetings, visit co-workers and clients, etc. So, when they come into the office they need a temporary place to "land" for the day, not a permanent place to "live."