Marketing Best Practices
Office buildings are not all created equal. Two spaces that are nearly identical in square footage and basic amenities may vary wildly in location, building condition, and general aesthetic. For this reason, general classifications have been developed to differentiate the types of office buildings on the market.
The Building Owners and Managers Association (BOMA) has established a three-tier rating system to assign buildings with a classification. The rating system isn’t set in stone and several factors are often open for interpretation, but having a general sense of a Class A building space definition vs a Class B or Class C can be helpful when evaluating different properties.
Building class is defined in several tiers to qualitatively measure a building for potential investors or tenants.
At a high level, every market is different. A Class A building in Indiana may not be comparable to one in Chicago or New York City where extremely high-end real estate can be found. Accounting for the market in which the building is located, there are four other factors that are evaluated when assigning a class ranking to an individual building:
|Class A||Class B||Class C|
|Location||Prime location with good accessibility||Good location||Average location|
|Age and Condition||Renovated or new with high quality building infrastructure||Old but in good condition||Usually older than 20 years|
|Amenities||Top notch amenities||Regular amenities||Outdated amenities|
|Aesthetic||Best looking||Average looking||Unattractive|
Let’s take a closer look at each of the classifications and how they are defined for individual buildings.
A Class A office space is the cream of the crop – the top tier real estate that will demand top dollar in your market. This is the benchmark for office space and, again, will vary depending on your market.
A Class A building is often located in the market’s prime central business district and is among the more aesthetically pleasing structures in its location.
It’s easily accessible, has plenty of parking (or ample transportation options in cities where that’s more important), and top-tier tenants who pay top dollar for the space. The office spaces within such a building are often managed by a professional management firm and they keep it in top condition. That means ample elevators throughout the building, 24/7 security services, and cutting edge systems as well as LEED certification.
A Class A office building sends a message to customers and clients that a company is at the top of the industry. Often, enterprise corporations, large law and accounting firms, and financial businesses operate within this type of space. In larger markets, there is a class even above A – the Class A+ office building. These are often the centerpieces of a city’s skyline – the absolute best of the best. Companies will fight for the opportunity to have an address in such a building.
A Class B office space is home to a more general base of tenant. These buildings are designed to meet all the basic needs of a company, but may not have the modern upgrades and amenities that you’d see in a Class A building.
A Class B building is ideal for companies that want to be near the central business district and have a fully functional facility with resources that meet their specific needs.
These buildings may be slightly older and they lack the modern flourishes of a top tier building, but the floor plans are functional, the resources always accessible and management solid. Rental rates are considered at-market and such buildings are a good fit for many types of businesses.
A Class B space is an average building that will provide everything needed to run a business efficiently with at-market rent. It’s a good fit for most businesses.
A Class C office space is considered “useable” in that it may not have all of the structural amenities and resources needed but will meet the basic needs of a company with limited budget or a small team.
Class C buildings are often outside the central business district and may not be in a desirable part of the market. The building is usually older than 20 years or unattractive with minimal renovations in recent years.
These buildings often have more vacancies and higher turnover rates than Class B or Class A buildings and their infrastructure may be limited or out of date, requiring additional effort on the part of the tenant.
Class C buildings offer lower rents due to the reduced demand for older spaces like this, and often with shorter terms than would be found elsewhere. Class C is often a good option for businesses just getting started or that have limited or reduced resources as they grow.
If you own or operate a Class A+, Class A, or even a Class B office building with updated amenities, it’s important to fully display what makes it special in your marketing materials. Three important places to emphasize how your building is classified include your:
That simple phrase, “Class A Office Building” can mean volumes to the right tenant or investor. Take advantage of the shorthand to emphasize the quality of your property, and then support your statement with a list of relevant features.
It’s one of the most effective ways to capture attention, nurture potential prospects into leads, and emphasize why your property is a unique opportunity.
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