When considering the office space, tenants have become aware that office buildings significantly differ in terms of quality and rental levels, and as such are generally classified as Class A, Class B, or Class C office buildings.
The difference between each of these classifications varies by markets, and Class B and C buildings are generally classified depending on the quality of Class A buildings.
The highest quality office buildings on the market are considered to be Class A. These premises are newly-built and equipped with state-of-the-art installations, air conditioning and technical systems.
Class A buildings are the most attractive and are located at prime locations within the city's business zone, easily accessible. These spaces have property management and organized maintenance.
Many high-rise buildings are considered to be Class A, having flexible floor plate and greater height. The large central lobby is also typical for buildings in this category. As a result, they attract the blue-chip tenants, and are also leased out at the highest rental levels.
Class B buildings usually do not have the same high-quality installations, architectural details and impressive lobby as Class A spaces, but generally have a good structure with functional facilities. Most Class B buildings have lower number of floors and are often located at somewhat less attractive locations. Another factor that separates class A and B buildings is age. Class B buildings are usually older than Class A buildings and may experience some deterioration. Some buildings are constructed as Class A buildings, but over time they may become Class B buildings after 10 years, or when signs of deterioration become visible.
The lowest classification of office buildings is class C. These are older buildings, usually more than 20 years old and are located in less attractive areas and require significant investment for renovation. Architecturally, these buildings are the least desirable, and construction infrastructure and technology are outdated.
This is a general guide for classifying office buildings, and one of the most important things to consider when classifying buildings is
the development of the office market and the overall office stock, as buildings should be analysed in the context of market supply, where Class A buildings in one market could be a Class B building in another market.
