The Hidden Cost of Offices: Maintenance Fees Are Rising 23 Times Faster Than Rents

It is important to note that the maintenance fee does not represent additional income for the property owner or manager. According to best market practices, the manager must ensure transparency in using these funds by providing tenants with a detailed report. Furthermore, if there is a surplus at the end of the fiscal period, it should be reflected as an adjustment in favor of the tenant, either as a discount on the next rent payment or another agreed-upon compensation.

So, what's driving the increase in maintenance fees?

Beyond broader economic factors—such as exchange rates, rising energy costs, higher wages and benefits, increasing material prices, and the surge in insurance premiums—maintenance fees have grown due to three key factors, according to SiiLA:

a) The expansion of Class A+ inventory, which includes advanced technology and more expensive services. Between 2020 and 2024, these buildings contributed the most to new office supply, increasing their share of the total office stock from 33% to 36%. In markets like Guadalajara, Monterrey, and Querétaro, they now dominate, accounting for 43% to 51% of corporate spaces.

b) The concentration of Class B office spaces in certain regions, where older buildings require more repairs. This type of property represents about a quarter of the total office stock. In markets like Guadalajara, its share is roughly equivalent to that of Class A properties.

c) Location, where competition and demand significantly influence the cost of services and essential supplies.

Currently, the average office rent in Mexico is approximately $21.4 per square meter per month, while the average maintenance fee exceeds $3.7 per square meter per month. This means that maintenance costs add about 17.4% to total operating expenses in the country's major office markets. However, this percentage varies depending on the property's class and the specific market.

In Guadalajara and Querétaro, for example, the difference in maintenance fees between Class A+ and Class A buildings is the most pronounced nationwide, with costs up to 9% and 11% higher, respectively, for top-tier properties.

In Guadalajara and Monterrey, however, Class B buildings tend to have higher maintenance costs than Class A+ buildings, with differences of 1% and 17%, respectively. Additionally, these markets—along with Querétaro—have the widest gaps between Class A and B buildings, with average disparities of 10%, 18%, and 9.8%, suggesting that these markets are less balanced in terms of operating costs.

In contrast, Mexico City's metropolitan area follows a different pattern. Here, although maintenance fees for Class B buildings are generally higher than for Class A properties, and Class A+ remains the most expensive category, the differences are less pronounced. This indicates a more homogeneous market, where maintenance fees follow a more stable structure across different asset classes.

These variations in maintenance costs directly impact tenant demand and leasing strategies in each market. In cities like Guadalajara and Monterrey, where gaps between asset classes are wider, costs can affect lease terms and tenant decision-making, with companies increasingly seeking short-term leases to reduce operating expenses.

In central Mexico, however, relative cost stability allows for more predictable financial planning, reducing business uncertainty and facilitating long-term decision-making.

To learn more about the factors shaping Mexico's commercial real estate market, visit SiiLA REsource or contact us at contacto@siila.com.mx.