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Classes of Office Buildings

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Commercial lease space.

Commercial leas space.

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Not all office space is equal, which is why a class system exists to categorize the age, amenities, aesthetics and general infrastructure of buildings. These classes are used to determine the space’s price, though many experts argue that the classifications are subjective.

Class A
The highest-quality space on the market is considered Class A. These spaces are generally newly constructed, and have been outfitted with top-of-the-line fixtures, amenities and systems. Class A buildings are usually aesthetically pleasing, as they reside in high-visibility locations, such as a metropolitan’s central business district. These spaces are normally maintained by reputable property management companies that keep them looking impeccable.

Height is another common characteristic of Class A buildings. Many high-rises are considered Class A buildings, and the offices inside these structures tend to have higher ceilings as well. A large central lobby is also typical in such superior spaces.

Class A rates are typically higher than the city’s average rent, and tenant concessions are rare. This is because premier Class A space is competitively sought-after by some of the most well-known and largest firms in the country. These spaces are popular among banking, real estate and law firms.

Class B
A Class B property is your average office space. These buildings don’t usually contain the same high-quality fixtures, architecture and lobbies as Class A space, but they are generally nice buildings with fully functional facilities.

Their locations, building systems and property managers are described as average to above average. Therefore, Class B space tends to command average market rent. The majority of Class B buildings are less than four stories tall, and are often found in the suburbs or on the outskirts of large financial districts.

Another consideration that separates Class A and B buildings is age. Many Class B buildings are a little older, and may be experiencing minimal deterioration or breakdown. Some buildings start out with a Class A grade, but are downgraded after 10 years or so once signs of wear and tear become apparent.

Class C
These are the poorest quality structures on the market. They tend to be located in the least desirable office districts, and are usually in need of major repairs and renovations. This is likely due to the building’s age, as Class C properties are more than 20 years old.

Some Class C properties remain occupied, commanding lower rental rates and attracting tenants with smaller operations who cannot afford nicer spaces or who do not need to reside in a central hub. Other Class C buildings are sold as rehabilitation or redevelopment opportunities.

With some improvements and repairs a Class C space can be upgraded to Class B, though it is unlikely to achieve Class A status, especially considering its location and aged infrastructure.

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