If you’re in the market for commercial office space, you’ve likely heard people refer to properties as “Class A” and “Class B.” What do these classes mean? Commercial office buildings are categorized based on their age, condition, amenities and location. Many factors—from maintenance to ceiling height—can affect an office building’s classification.
Building classes help commercial real estate brokers interpret market data and draft leases. They can also help prospective renters and buyers determine if a property will fit their business’s aesthetic and budget. What qualifies as a Class A, B or C building can vary depending on the market. In this article, we spell out the differences between each class.
What Is a Class A Building?
Let’s start with the best of the best. The Building Owners and Managers Association (BOMA) defines a Class A building as a “premier space with rents above average for the area.” Class A office spaces have newer, high-quality finishes along with updated systems and technology. These spaces are built to impress and range from 50,000 to 250,000 square feet, depending on the area.
Class A office spaces are in new to like-new condition, and they are located in desirable neighborhoods with more visibility. These properties often have central lobbies and high ceilings. Due to their top-tier amenities and appealing aesthetics, Class A office rents are much higher than the market average, and tenant concessions are not usually offered.
Class A building amenities may include:
- Security systems
- Fast wi-fi
- Parking garages
- Neighboring premier tenants
Law firms, investment firms and other high-profile companies are often tenants of Class A office suites.
What Is a Class B Building?
Class B office spaces are the middle ground between suites with impressive aesthetics and spaces that are a little rough around the edges. Most Class B buildings are 10 to 20 years old. While these properties show signs of age, Class B buildings are still elegant and functional office spaces. They may not pack the pizazz—or price tag—of Class A office spaces, but they fit the bill for many businesses.
As you may have guessed, Class B office spaces don’t have the same amenities as Class A office spaces. They don’t have security systems or elevators, and they won’t be located on the thoroughfare. However, a Class B property works well for a range of office tenants looking for a nice space at average rental rates.
What Is a Class C Building?
Spaces labeled Class C are usually over 20 years old with a long history of previous tenants. These properties are functional spaces that lack extra bells and whistles and can be found in less desirable neighborhoods. Some Class C properties may need to be repaired or completely renovated. For these reasons, Class C office spaces are offered at below average rents.
Though Class C properties only have the bare essentials, they are affordable options for businesses that don’t service high-profile clientele or need to look the part. Class C office spaces are great for startups and small businesses that need a place to work without breaking the bank. These properties are often marketed and sold as re-development opportunities.
Which of the Office Building Classes Should You Choose?
Building classifications are subjective. No official standards determine classification across cities, states or countries. What’s considered Class A, B and C office space changes based on the other buildings in the area. A Class B building in one city may be a Class A building in another.
Do you need a luxurious lobby? Do you need a large parking lot? Maybe you only need space for four desks and a coffee pot. Each building class fulfills the needs of different tenants. Knowing a building’s classification can be helpful, but there are more specific characteristics commercial real estate brokers, investors and tenants can use to compare properties.
As you look for office space, consider the following details:
- Square footage
- Construction date
- Floor load capacity
- Backup power
- HVAC systems
- Repairs needed
- On-site amenities
- Nearby amenities (restaurants, ATMs, etc.)
- Security and life safety systems
- Access from major streets and highways
Classifications are used to give you more information on the condition and history of the space. They can help you narrow your search if you desire a certain type of property. At the end of the day, a property’s potential is in the eye of the beholder—not its building class. Find a space that suits your company and don’t worry about the rest.
Looking for commercial real estate in Branson, MO? Are you hunting for an office building or suite?
Contact Commercial One Brokers. Choosing a new location for your company isn’t easy. Let the Branson area experts help. With our extensive experience and in-depth market research, we’ll help you find the best office space for your business.