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How to Distinguish Among Class A, Class B, and Class C Buildings (2020 Edition)

February 2, 2020 | by Nell Lanman
Reviewed by real estate expert Michael Colacino

Knowing the differences among Class A, Class B, and Class C office buildings will help you narrow down your search for new office space. Though determining building classifications isn’t an exact science, building class usually denotes the general condition of a commercial property and indicates quality of location and amenities. Conventionally, the better the “grade” or classification, the more desirable the property, but as we’ll see, your business’s needs mostly define desirability.

Basically, if you’re looking for the best that commercial real estate has to offer, you’ll look at Class A buildings. If you have a lower budget and just want functional space to work in, you will go see Class C properties. If you can afford average rental rates and want something a little nicer than Class C, you’ll want to consider Class B buildings.

Of course, there’s more to it than that. Let’s review the basics.

Class A Buildings: The Cream of the Crop

Without fully knowing what Class A buildings are, you can quickly ascertain that they’re the best in breed commercial buildings can offer. Typically, Class A buildings are the newest, most modern high-rises on the market, with “high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence,” according to the Building Owners and Managers Association International (BOMA).

What is a Grade A office building?

Sometimes, “Class A” office buildings are instead called “Grade A” office buildings. In metropolitan areas, Class A buildings tend to offer large scale commercial spaces in the most desirable neighborhoods. That means they command top rental rates, too.

As a result, the commercial tenants competing for Class A space tend to be well-established, category leaders in their industry. Large financial institutions, ad agencies, law firms, and tech giants usually compete for Class A spaces. Here’s why. Besides boasting an aesthetically pleasing interior and exterior, Class A buildings have:

  • On-site building management and security
  • Attended lobbies
  • Fancy HVAC systems
  • Fast, reliable Wi-Fi
  • Parking garages
  • Other premier tenants in the building

One example of a Class A building is 1500 Broadway in Times Square in New York City. It has hosted ABC Studios’ Good Morning America since 1985 and also provides office space for prominent tenants like Disney, Starbucks, NASDAQ, and IIG Capital. It boasts 13 floors of space and has a lobby attendant, fiber Internet, and a freight elevator. Though it’s more than 40 years old, which is unusual for a Class A building, it enjoys a premier location and is considered a tourist attraction.

In summary, Class A property is built to impress. If you’re an industry leader or otherwise work in a business where prestige is a valuable currency, leasing office space in a Class A building makes quite the statement.

Class B Buildings: Comfortable, Elegant Space

Don’t let the grade fool you: some Class B buildings enjoyed Class A status in their heyday—they’re just slightly older now, with visible signs of age. If you’re looking for an elegant, functional space without the “wow” factor—or the high price—of Class A properties, Class B buildings are a sensible option.

What does a Class B building include?

“The majority of Class B buildings are fewer than four stories tall and are often found in the suburbs or on the edge of large financial districts,” according to The Balance Small Business. What a Class B building may sacrifice in amenities, like 24/7 security or a bank of elevators, it makes up for in price without having to sacrifice on location, accessibility, and overall functionality. Class B properties with established tenant history have a vast capacity for tenant improvements to the space as well.

75 Maiden Lane, an office building located in the Financial District in NYC, well-represents its Class B status. 75 Maiden Lane is conveniently located near lots of public transportation and plenty of coffee shops and restaurants, but the building itself is nearly 100 years old. While it’s quite a bit older than most Class A buildings, it still attracts respectable tenants, mostly technology and consulting firms.

In summary, Class B buildings suit most businesses looking for attractive, functional space that makes an impression on clients and recruits without breaking the bank.

Class C Buildings: Functional, No-Frills Space

If you’re less concerned about the space class and more concerned with low rental rates, Class C buildings might be your best option — if you’re looking for a private office. If you don’t necessarily care about having your own office and you would prefer nicer digs at the expense of privacy, shared space solutions like PivotDesk could enable you to rent a nicer space within your budget.

What does a Class C building include?

Class C buildings offer functional space with old or rough finishes and some basic amenities at a fraction of Class A or Class B costs. They offer the lowest commercial rental options. But you definitely get what you pay for—like a patch of hallway for a “lobby” or a glacially slow elevator. They also might be located in less-than-desirable neighborhoods.

Class C office space
A design hack here or there can transform Class C space into a perfectly functional, quirky office. Photo courtesy Jonathan Chen via Flickr.

If you’re a small business on the prowl for enough room to fit a few desks and a coffee pot, you can find affordable office space in a Class C building without embarrassment. And you can often make tenant improvements to upgrade the space.

If you have questions about the differences among Class A, Class B, and Class C buildings in your city, contact one of our experienced brokers, who would be happy to help you find your next office space.

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