Building Classes Part II
The Three Building Classes
There are 3 building classes in BOMA’s metropolitan base. The metropolitan base is used within a single office market. There is a separate international base for comparing properties across international markets, but it is primarily used by landlords and property investors. The metropolitan base is what our clients, strictly tenants, encounter most.
Class A buildings receive the highest distinction, because they are usually the top-quality buildings in their market competing for the top office tenants. These buildings are in close proximity to popular amenities and transportation. They are easily accessible, making convenient commutes for their tenants and visitors. Age is only a number when it comes to Class A buildings. As long as renovations have been consistent and the building finishes and systems are current and state-of-the-art, even an old building with fascinating exterior architecture or iconic local character can be labeled as “Class A.” As the desire for sustainability increases, the importance of green building infrastructure plays a role in Class A determination as well. Building ownership and current tenant rosters add to the mix of considerations; good reputations are key. Because of their market presence and high-quality attributes, Class A building landlords usually price their square footage above average for the area and attempt to attract tenants who are able and willing to pay it.
Class B buildings may be considered “average” in their markets. Their landlords are competing for a wide range of office tenants and price their buildings around the average rate per square foot. These buildings may be in slightly less desirable locations or might be less readily accessible to major roadways than Class A buildings. Tenants looking at Class B space will find average or slightly better than average finishes and building systems in place. Sustainability renovations in Class B buildings may be smaller scale than in their Class A counterparts and the building itself may be older and have more dated architecture and interior design. Class B building are adequate in every way but are not able to compete with Class A buildings at the same price.
Class C buildings could be considered slightly “below average” in their markets. These buildings compete for tenants by offering functional space at a low price. As different parts of a city experience a natural rise or fall in investment and popularity, market popularity shifts as well. But unlike people, buildings can’t move from one market to another. Class B buildings that suddenly find themselves in a less popular market, may drop from Class B to Class C. This is important to understand, because while some Class C buildings may fall short of expectations, others will have all the desirable attributes of a Class B building without the convenience or proximity offered by a different location. For the most part, tenants looking at Class C buildings can expect average or below average building finishes and systems. These buildings might be showing their age a bit more than others. Despite these drawbacks, it may also be easier to negotiate flexible lease terms with a landlord when it comes to Class C buildings. It’s always best to tour a building first and weigh the pros and cons before making a quick decision based on subjective classes.