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How are office buildings classified?

On Behalf of | Dec 14, 2021 | Commercial Real Estate |

When in search of a commercial real estate investment, office buildings have much to offer. However, it is important for investors to understand the type of office space they are purchasing.

Building classes provide insight into the quality of the space and the type of experience it offers. Things like rent, amenities, efficiency, and architectural features determine a building’s class and its value. Here are some other facts to consider when it comes to building classes.

Class A

Class A offices are the most prestigious in their specific area. They appeal most to a high-end tenant who is willing to pay a higher-than-normal rent as compared to similar properties in the area. These buildings usually offer the best amenities, such as fitness centers and expanded food service areas. They also feature state-of-the-art equipment and systems, which attracts tenants in search of a high quality office experience.

Class B

While still sufficient, class B buildings are not on the same level as class A. These office spaces feature standard fixtures, features, and amenities. Rent for these spaces are comparable to similar properties in the area, which means they are more competitive.

Class C

Class C buildings fall well below class A and B in terms of quality. These spaces are functional, but lack the flourishes and convenience offered by the other classes. Because of their basic design, class C buildings incur much lower rental rates than other buildings in the area.

There are other factors that influence a building’s quality. For example, proximity to public transportation can make an office space more attractive to tenants. The type of market can also play a role in building classes, as preferences vary from location to location.