The “ABC” of Office Building Classifications
Ever wonder why office buildings are classified as either Class A, Class B or Class C?
The difference between each of these classifications varies by market and class B and C buildings are generally classified relative to Class A buildings.
Building classifications are used to differentiate buildings and help the reporting of market data in a manner that differentiates between building types.
That said there is no definitive formula for classifying a building, but in the general characteristics of each are as follows:
> Highest quality buildings in their market
> Generally the best looking buildings with the best construction and high quality infrastructure
> Well-located good access and professionally managed
> Attract the highest quality tenants and command the highest rents
> Generally a little older but still have good quality management and tenants
> Often value-added investors target these buildings as investments since well-located Class B buildings can be
returned to their Class A glory through renovation
> Class B buildings should generally not be functionally obsolete and should be well maintained
> Older buildings (usually more than 20)
> Located in less desirable areas
> In need of extensive renovation
> Architecturally these buildings are the least desirable and building infrastructure and technology is out-dated
> They have the lowest rental rates, take longer to lease and are targeted as re-development opportunity
There is no formal international standard for classifying a building, but one of the most important things to consider is that buildings should be viewed in context and relative to other buildings. BOMA is generally against the publication of a classification rating for individual properties.
Here are some of the building characteristics which could be used to compare and rank buildings:
* HVAC capacity
* Elevator quantity and speed
* Backup Power
* Security and life safety infrastructure
* Ceiling heights
* Floor load capacity
* Access (freeway, public transportation)
* Construction, common area improvements
* Nearby and/or on-site amenities