Classes of office buildings: what does an A, B, C category mean?

Bálint Erényi at December 29, 2022

When it comes to office spaces, it is quite clear that in the world of office buildings, the downtown tower with its charming Italian marble lobby belongs to the “A” class.

However, it’s probably not surprising that a simple office building in a less upscale part of the city, with wainscoting and plenty of fluorescent lighting, would probably be called class “C”.

The classification of an office building is not always so simple. What about office buildings in between these two examples? What does the Class “A, B and C” office building ranking really mean and who defines them?

Classifying an office building is more of an art than a science

Specialists have already made several attempts to classify the quality of spaces, but there is no definite and proper official classification system. In many cases, real estate agents in certain regions do not work based on the definitions for each class. It is therefore important to consider buildings in the context of their specific markets.

Companies such as BOMA International or NAIOP offer a wide range of descriptions of the three existing classifications, but these are simply suggestions, It has to be said that in this case almost everything is subjective.

How can we classify an office building?

Although it varies from company to company, real estate owners and distributors typically use the following criteria to classify office buildings: age of the building, location/accessibility, infrastructure, technological options, general rents in the area, market perception, quality and maintenance of the HVAC system, ownership issues and, of course, comfort services.

All of these can determine whether or not a property qualifies as class “A, B and C” office space. Let’s take a look at the characteristics of each office building class and the pros and cons that can help you decide which one is right for you.

What is class A office space like?

The A class, the first class. These buildings represent the highest quality in the market. They look good and usually have architectural features and interior design values that will impress anyone. But class “A” office buildings are not only attractive. They provide their customers with latest technology, high-performance and efficient HVAC systems, high-tech security and fast elevators.

In addition, many class “A” office buildings offer other amenities such as covered parking, coffee shops, concierge services, fitness centers, and outdoor workspaces for affluent businesses. These businesses often provide services such as law firms, architectural firms or advertising agencies. These prestigious are usually centrally located and therefore face serious competition for prime tenants.

Of course, all these features and amenities result in rents that are among the highest on the market. But if the image is important to your business, and you would like to operate your business in a well-managed property, and can afford the high rent, then class “A” is the best choice for you.

B-class office building

Tenants working in a Class B building don’t necessarily need to be in the middle of the action, and they don’t need an outward display of affluence. They want to ensure that employees have a comfortable, modern workspace. These office buildings are generally nice, fully functional buildings. Typically do not boast the same high-end fixtures, interior designs, and striking lobbies as class A buildings. Class “B” tenants include companies that prioritize functionality over appearance. Often operate in areas such as IT, creative services, call centers, and professional services that serve a smaller, less conspicuous crowd. The amenities of class “B” office buildings may include on-site parking, security guards, comfortable conference rooms, bicycle storage, and a cafeteria/dining room in the building. So if the location and the quality of services are less important to you, because the affordable price is more important, then let’s consider the class “B” office building.

Class “C” office building for functionality

For a business just starting up or in the early stages of growth, when the budget is limited, a class “C” office building is a good choice.

In general, these buildings are quite functional, but they are not as good looking, and they tend to be located in less attractive neighborhoods as class “A” or “B” office buildings. Class “C” buildings are typically 25 years old or older. They may need renovation, and their technology and infrastructure are likely to need updating. Additionally, buildings may not be professionally managed or maintained. Therefore, in relation to the rent, the businesses that rent here can have a greater bargaining power.

The traditional categorization is slowly becoming a thing of the past  

In 2014, the WELL Building Standard Certification, known as the WELL certification, was established, which is a comprehensive building certification related to well-being.

The WELL Building Standard is a repository of requirements and good practices supported by scientific facts. It is nowadays slowly taking over the role of A, B, C building categorisation. The most comprehensive certification of these is the WELL Certification.  Obtaining this certification requires careful design and construction, prudent operation and conscious building use.

This comprehensive certification has evolved into smaller, thematic certifications called Ratings. WELL Ratings allow a commercial property or office building to communicate its commitment to health and safety, equity or quality as demonstrated by on-site measurements to tenant businesses, owners or the outside world.