The massive fire struck two buildings in Largo do Paissandu on Tuesday, causing one of the properties to suddenly collapse.
The building is reported to be the former headquarters of the Federal Police, however it's been empty for several years and was recently occupied by groups of squatters. Emergency workers were in touch with at least one person who was trapped atop the burning building, Euronews reported.
There have been unconfirmed reports that there were people on the top floors when the building collapsed. The government estimates that almost 4,000 families are living in vacant buildings downtown.
One resident, Romulo de Souza, told Globo TV that the fire started on the fourth floor.
Debris of a building which was engulfed by a fire and collapsed, in Sao Paulo.
After starting a fire in the house started evacuation, but it is unknown how many people were in the building at the time of the fire and managed to evacuate. Three people were unaccounted for, he said. My husband and I woke up with the noise of glass breaking", she told CNN, adding: "Every day we pass by there and we knew that there would be a tragedy.
Firefighters believe clearing the rubble, which was still smouldering hours afterward, could take days.
Firefighters set up a perimeter and worked to evacuate people, with local media reporting that around 150 people lived in the lower 10 floors. Highly organized squatters have taken over as many as 70 buildings in the downtown area of South America's largest city.
Scores of homeless families were occupying the building, according to officials.
Then-mayor of Sao Paulo, Joao Doria, had launched an aggressive crackdown on these communities.