Difference Between Commercial Office Building Classification Types

When searching for office space it’s important to understand the building class types as it’s how you are able to compare them to each other. Office space buildings are typically classified as A, B, or C which represent a subjective quality rating based on each buildings ability to attract similar tenants.  The following factors are typically considered when determining a buildings class:

• Age of building
• Location
• Building finishes
• Technological capabilities
• Rental rates
• Amenities
• How well building is maintained
• System standards and efficiencies
• Location and accessibility
• Market perception

Building amenities would be considered as services provided in a building that are helpful to office tenants or their employees and include services such as fitness centers, child care services, food facilities, copy services, building conference rooms, mail service, dry cleaning services, etc.  Building finishes would include the quality of materials, architectural design, and other hardware and finishes.

Definition of Classes of Office Space

Class A Office Space

Typically the most prestigious office buildings in the best locations (e.g Austin office space for lease in downtown Austin). These buildings will compete for the premier office users who seek “image” space, and rents will be higher than average for the area. Class A office buildings will have state of the art building systems, modern technology, amenities such as fitness centers and conference rooms, high level building finishes, defined market presence, and the best accessibility.

Class B Office Space

These types of buildings are well suited more most types of users and the rents will be in the average range for the area.  They are typically 10-20 years old however the building and systems are well maintained. Some maybe a little outdated and not have the most modern technology and mechanical systems, however after a few upgrades some can be converted to class A. You typically won’t find any security guards, fitness centers, or other amenities found in class A.

Class C Office Space

These office buildings compete for tenants seeking value, functional space. Rental rates will typically be below average. They buildings are typically about 20 years old. Some have been renovated and are well kept, however most of them will lack modern upgrades. For example the HVAC systems may not function as well and the elevators and other mechanical systems are outdated. Class C Buildings are typically found in the least desirable areas

In summary if you are a company that needs to have a certain “image” level then Class A space is right for you.  If you just want to be in a nice, well maintained building with average lease rates then go with Class B space.  If you are a startup or nonprofit and on a budget then Class C office space will be your least costly option.