• Read more: Occupancy Costs in Industrial Properties Are Rising, Demanding Strategic Attention From Tenants in Brazil 

Although rent typically accounts for the largest share of occupancy expenses, other costs significantly impact a company’s finances. According to Márcio Kawashima, managing partner at FMR Engenharia Diagnóstica — a firm specialized in diagnostic reports and real estate technical inspections — occupancy costs fall into two categories: direct and indirect.

“Direct costs include rent, condo fees, taxes, utilities (electricity, water, sewage), telecom, cleaning, and security. Indirect costs involve preventive, corrective, and predictive maintenance, space management, administrative expenses, and insurance,” Kawashima explains.

This classification, he says, gives companies a broader understanding of the elements that affect their real estate budgets — beyond what is contractually negotiated with the property owner.

Igor Reginato, director at Colliers, adds that companies must also factor in the total operational cost of occupying a space:

“Adaptation, maintenance, and overall operating costs must be considered. These aren’t limited to the property itself but also include what it takes to run the business in that location. A prime location often comes with higher rent and fees, but also a more expensive operational environment overall,” he notes.

Kawashima also clarifies the division of responsibilities between tenant and landlord:

“The landlord is responsible for the capital investment and for ensuring the overall integrity of the property. Routine maintenance, however, falls to the tenant. Upon move-in, a checklist is created and a technical report is issued to formally document the unit’s condition. From that point on, it’s the tenant’s responsibility to carry out necessary maintenance and repairs,” he explains.

In the case of more severe deterioration not caused by misuse, responsibility shifts back to the landlord, particularly when major investments are needed.

Many of these expenses can be controlled — or at least anticipated. Preventive maintenance, according to Kawashima, is one of the most effective strategies to avoid unexpected costs:

“It’s essential to perform an annual preventive inspection. This helps preserve the building’s condition and allows companies to prepare more accurate budgets for the following year. With solid planning, the risk of financial surprises is significantly reduced.”

Reginato points out that a lack of long-term planning is a common pitfall for companies:

“One key consideration is understanding the motivation behind a headquarters relocation and carefully planning the new space — in terms of both size and function. These discussions must happen early on. Leaving everything to the last minute compromises the entire process and drastically reduces the chances of success,” he warns.