Building Classes Part I
When looking for new locations, tenants may come across buildings touted as “Class A” or advertised as having “Class A finishes.” To an inexperienced buyer or renter, the meaning of this class distinction is a mystery. “Class A” sounds like a good grade; it’s better than a “Class D” or a “Class F,” right? Taking the steps to familiarize yourself with building class distinctions and where they come from can help you to narrow down your search or feel more comfortable with leaving your options open. It's equally important to recognize that building classes are chosen by their landlords and recommended by their agents. An agent can recommend labeling a building as "Class A" without it meeting Class A standards. It's all relative, so knowing what really makes a building a Class A, B, or C is vital to making smart choices about your business's next space. Let’s take a look at where building classes originated.
The Origin Story
Buildings and their landlords differ from case to case based on their construction, location, amenities, accessibility, rental rates, functionality and more. With all of these factors to consider, tenants and landlords needed an easier way to quickly judge a building’s market value and competitive ability to attract similar types of tenants. Building class distinctions were developed by The Building Owners and Managers Association International (BOMA) in order to help compare properties across local and international markets.
By using the BOMA standards to define their building’s class, landlords and their agents can attract different types of tenants to their property and compare their building more easily to others in their commercial real estate portfolios. Tenants looking for buildings of a certain class should be aware that though there are standards suggested by BOMA, the class chosen for buildings is a subjective quality rating by the landlord and their agent. Buildings can change classes as they age, become renovated, or even as popular markets shift from one part of a city to another. So, though building classes can be a helpful tool when narrowing your property search, it’s important to keep your options open and understand that “Class A” is really in the eye of the beholder.