Office building classification guide – Classes A, B & C

Author Ivan Smiljanic Read bio
Tags: office buildings office space
Date: October 13, 2020

You must have noticed by now that we often use terms such as Class A office space. Let’s talk more about office building classification so you can fully understand the terminology.

Commercial office space refers to all commercial properties that offer 1 or more rooms fit for business activities, office related or administrative work, such as meetings etc. 

There are three different classifications within the specter of commercial office space, Class A, Class B and Class C. The standards that define these classifications may vary from market to market, but there are some general definitions and characteristics that can help with determining what the property type is.

Class A 

Class A commercial office space is the most prominent office space, generally in every market. Class A properties are usually new(er) buildings, well constructed and the ones that offer blue ribbon infrastructure to its tenants

They can be identified by their appearance too, since maintenance and upkeep on class A buildings is highly prioritised. Great amenities, eco-friendly solutions, upgraded fixtures can be considered a standard among these buildings. 

High cost is associated with Class A office space as well, due to the fact that they are highly accessible and located in high-traffic areas, usually near major roadways or airports. 

Class A buildings are most likely professionally managed by an eminent company, which will attract many long-term tenants, as well as command highest rents.

Brown building

Class B

Considered to be a slight downgrade from Class A properties, Class B commercial office space is still worth a lot in the commercial real estate world. These properties offer many benefits like class A, such as professional management, good accessibility and quality tenants without the extra costs. Class B office spaces are a bit older, but still have good infrastructure and are well maintained. 

Investors find Class B properties appealing because their value can be easily increased with some simple tweaks and upgrades, thus restoring their Class A glory once again.

Class C

Coming in last place and considered to be the lowest classifications of office buildings and space is Class C. These are older buildings (usually 20 years or older) which are located in less desirable locations and often require a lot of renovation and work.

Speaking from the point of architecture, Class C buildings are the least enticing and their infrastructure is outdated. As the result of that, these buildings have the lowest rental rates, are often targeted as re-development opportunities and take the longest time to lease.

With dedication and work, Class C properties might restore their Class B status, but are not likely to ever become class A (there is a very slim chance), largely due to their location.

Renovations of a building

Which one is the best?

Nobody can decide which type of commercial office space is best suited for your needs, but you. 

The answer to which one is the best really depends on what you’re looking for in a property. If you are an investor who can afford to spend money and time on renovations, then Class B or C properties might be the best fit for you.

If you are on the other hand, a small business that doesn’t need a space that offers much exposure, then go for Class C property. 

Class A commercial property might make sense if you are a business that is focused on innovation and technology, and a higher rent for all the extra amenities is a good investment.

Your mission, your finances and your needs play a crucial role in the decision making process and choosing the right commercial office space.

No matter if you know exactly what you’re looking for or not, IPG real estate experts will assist you in finding the optimal space for your commercial office. Bringing professionalism and dedication to the table, we won’t stop working until you have closed on the property perfectly suitable for you. Contact us today and see why our team has been successfully operating in San Francisco for a long time.