Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal property taxes, insurance on building and contents, depreciation, and amortization expenses. These are generally higher in new entrants to a market due to the escalating real estate prices. This type of cost cover the whole society since land is inextricably linked to human life.
In the case of commercial leasing, occupancy costs are those lifetime costs of a commercial lease not related to typical rental costs, such as additional fees paid by the tenant to the landlord. Some examples include late penalties, special overhead charges, square footage gross up factors, personal guarantees and any other event that will create a cost for the tenant.
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