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Is All Office Space Created Equal? Understanding Class A, B, C Office Space

Finding the best office space for rent for a business can be confusing. Sometimes it’s hard to know exactly what to look for, where to look for it, and how to choose the best office space for your business.

That’s where classifications of office space come in handy. By assigning an office building a class, it’s easier to make a more even comparison of one space to the next within the same market.

How is Office Space Class Determined?

According to BOMA – the Building Owners and Managers Association – office space is divided into three main classes: Class A, Class B, and Class C.

There aren’t any hard-and-fast rules to office space classification, and rankings of office buildings vary from market to market.

For example, a Class A office building in a smaller market like Wichita, Kan., that commands top-dollar office rent might be rated as a Class B or even a Class C office property in a larger city such as Denver or St. Louis.

But regardless of the specific market, there are four qualitative factors used in determining office space class:

  1. Location
  2. Building age and condition
  3. Amenities
  4. Aesthetic

Beyond these general factors, there are also specific criteria used in determining Class A, Class B, or Class C office space.

What is Class A Office Space?

Considered the best of the best, Class A office space is the benchmark against which other office buildings are measured.

Some Class A office space criteria are:

  • Prestigious, flagship building in a prime central business district location;
  • Distinctive architecture with quality interior furnishings to match;
  • Great location with convenient access and plenty of parking;
  • High rental rates with a strong presence in the market place;
  • Premier tenants and professional property management;
  • State-of-the art mechanical systems, plenty of elevators, and 24/7 building security;
  • LEED certified;
  • Tenant services such as valet or concierge, and prime on-site amenities such as retail, restaurants, dry cleaning, fitness centers, and pet care.

Why Choose Class A Office Space?

Class A office space is best for tenants that wish to make a bold statement about the quality of their company, since such a prestigious environment impresses clients and employees by giving an impression of excellence .

Global corporations, law firms, accounting partnerships, and business in the financial services industry often lease Class A office space.

What is Class B Office Space?

Where Class A office buildings have the highest rents and prime tenants, Class B office space is home to a general tenant base with at-market office rents.

Ranked one grade below Class A, Class B office space may be described by the following characteristics:

  • Central business district but not at prime locations or corners;
  • Slightly older office buildings with good finishes inside and out;
  • Well-maintained with functional floorplans;
  • Average at-market rental rates;
  • Quality tenants and good property management;
  • Building systems are good, but not at the level of a Class A office building.

Is Class B Office Space a Better Choice?

Class B office space offers businesses an average at-market rent in exchange for an average office building with general amenities.

Tenants leasing space in a Class B office building won’t break their budget paying for things they might not need such as 24/7 manned security or museum-quality architecture.

What is Class C Office Space?

Class C is the lowest ranking for useable office space and is just below Class B. This class of office space is outdated but still functional.

Common criteria of Class C office space include:

  • Less desirable location in older parts of the market;
  • Aged office buildings with plain vanilla architecture;
  • Extensive renovations needed;
  • Lower rental rates and higher vacancy levels;
  • Obsolete technology, limited infrastructure, no amenities.

Who’s Best for Class C Office Space?

Tenants looking for basic, functional, budget-friendly space may find Class C office space just what they’re looking for.

Because Class C office buildings are often more difficult to lease, motivated landlords offer lower rents, shorter lease terms, and more concessions than would be found in a Class A office building.

Businesses just starting out before they move up to Class B or Class A office space, and companies needed space for back-office functions like data entry or call centers find Class C office space to be the best match.

What About Class AAA, Class AA, and Class A+ Office Space?

In addition to the industry-standard office categories of Class A, B, and C, in some markets, new classifications for office space are also starting to appear.

While Class A office space sets the benchmark for prime office space, Class AAA, AA, and Class A+ office space are all levels above and beyond Class A space.

Trophy office properties found in Manhattan or Los Angeles are sometimes classified as Class AAA office buildings. In Chicago, a Class A office that undergoes a $100 million capital improvement may then be designated as Class A+ because it’s even better than it was before.

Contemporary design and layout of an office building can also affect the property’s class. An office building with museum-quality features such as extensive landscaping, high atrium ceilings and common areas designed by a world-famous architect can earn a building a Class A+ or Class AA rating.

Does Office Class Really Matter?

The short answer to this question is that it depends on what a tenant is looking for.

The nice thing about office space in most markets is that there’s something for every business. Not every tenant needs Class A office space, or even Class B space for their business when Class C space will work perfectly well.

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