What Are Office Space Classes?

Office buildings are rated by four classifications which include Class A+, Class A, Class B, and Class C. Determining the quality of office spaces involves more than a grading system and is more an art than a science.

There are specific factors involved in establishing office space classes before the listing goes public. There aren't any guidelines in the industry for classifying buildings. The Building Owners and Managers Association or BOMA, usually is resistant to publishing classifications for specific properties. However, most professionals in the real estate industry base their criteria of availability on the market and comparisons to properties of a similar size. The characteristics that real estate professionals base their criteria on include the materials used to construct the building, the age of the property, the design of the property, and the finishing materials.

The capacity of essential services that include current and future needs. Necessary services include air conditioning, heating, maintenance, upkeep, and Internet services. Additional considerations are backup power, lobbies, elevators, and upkeep of common areas. Access to public transportation and major highways is essential. Additional considerations are security measures, the height of the ceilings, and location. Improvements and construction of the common areas, whether current or ongoing are factors. Classifying an office space may depend on features and amenities that include fitness centers, mail and copy services, dry cleaning, cafeterias, and daycare centers.

The four classifications for rating buildings can help real estate brokers, landlords, potential tenants, and investors compare buildings in a specific market. However, there isn't a global rating to compare buildings. There are considerable differences between a Class A building in Boston and one in Manhattan. It's essential to consider that buildings are classified by comparable markets rather than worldwide. In commercial real estate markets, the Class A+ rating is reserved for buildings constructed to the highest construction standards with the best materials, the most extensive array of amenities, prime locations, stunning views, and easy access to transportation. They're often referred to as trophy buildings due to their prestige, design, and technology. Examples of Class A+ buildings include One World Trade Center in Lower Manhattan, the Empire State Building in New York, and the Sears Tower in Chicago. Class A+ tenants expect exceptional amenities including better allocation for parking onsite for employees and clients, restaurant and on-site cafes, fitness centers and spas, mail and banking services, daycare centers and communal areas.

Class A buildings are famous for their proximity to the central business districts within their markets, and may often compete with high-end tenants to get global recognition. These buildings usually have high rates of occupancy, very few tenants that require more floor needs or greater space, and feature exceptional amenities few businesses have the resources for. The most common amenities in Class A buildings include cafes and restaurants, spas and fitness centers, atriums, daycare centers, and retail shopping on the lobby floor are most common. Since expenses are virtually unlimited, Class A buildings usually feature high ceilings, tasteful decor, and overhead lighting that's employee-friendly. The higher costs are worth the services and amenities these buildings offer.

Class B buildings are commonly between ten and twenty years behind the current developments in buildings in a specific market. They may offer some amenities that are similar, but not up to the same standard. Heating, cooling, and electrical services may not adhere to current standards, and communications, and fiber optics infrastructure may be outdated, but they may offer competitive and valuable office spaces for high to mid-level clients. These buildings are usually improved, remodeled, and updated to the expectations of clients without a Class A commercial lease. Class B buildings are usually located off the main street, have fewer parking and security options, and usually need more construction than Class A buildings, but are attractive and can house businesses of any type.

There aren't Class D or F buildings in the classifications, but Class C buildings may be close for their wear and tear. Tenants have occupied these buildings for years and improvements aren't frequent, making these buildings less attractive to tenants than newer, up-to-date facilities. Another consideration with Class C buildings is they lack amenities including concierge services, security, and lobby attendants which are common in newer facilities. When a building lacks specific amenities such as up-to-date heating and cooling systems, elevator service, on-site parking, and lobby attendants is likely to get a Class C rating, without seeing the facility. However, if you're in the startup phase, have low overhead, and are searching for a competitive lease, a Class C building could be a good starting point.

When you're considering the different classes of office space you should know what to expect. Companies with boutique clientele, who want higher visibility when they operate in major cities, or when they want to lease space on the street level, will likely compete for Class A building space. However, these considerations don't always reflect the services offered. The primary consideration should always be the specific needs of your business. The company's ability to provide you with the services and amenities you need should come first. Companies in investment, luxury services, or legal services should first focus on their overhead, the amenities the building offers, and serving employees and clients.

Class A buildings are the newest, state-of-the-art buildings with the most extensive amenities. Class B buildings are somewhat older with good visual appeal. It's important to stay up-to-date with current rates for the best loan options. Class C buildings are likely to be occupied by small, family-owned and operated businesses.