If you are new to commercial real estate investing or are looking for your new office space, you may not know that commercial real estate falls into three different categories. When you are looking at your commercial real estate options, what exactly is the difference between Class A vs. Class B real estate?
Understanding the distinctions among different classes of commercial real estate structures can assist you in navigating your search for office space and narrow down the potential properties to consider. While classifying buildings is not an exact science, the class system typically reflects the general state of commercial property and indicates the quality of its location and amenities. Generally, properties with higher classes are more desirable, but this will depend mainly on what your business needs from a commercial space.
Class A Properties
Class A properties are generally known as the most prestigious and highly sought-after buildings in commercial real estate. Class A properties will also have a strong market presence, high-quality improvements, and high-end finishes, are located in a prime market area, and have the latest technology.
Those seeking out Class A properties have more than just office space in mind; they are often looking also for their clients, and they aim to create a positive and professional impression. These businesses are frequently located in financial districts and offer services such as legal, architectural, advertising, or financial management.
The Aberdeen is a shining example of a Class A property. This iconic building located directly on the Dallas North Tollway just South of Belt Line is a can’t-miss Class A opportunity for office users. With a Deli, Fitness Center, Conference room, and Free Shoe Shines, The Aberdeen’s tenants have everything they need at their fingertips.
Class A amenities can include (but are not limited to):
- High-end finishes
- Covered parking
- Fitness Center
- Shoe Shines
- Conference Center
- Car Wash
- Free Wifi
- Concierge services
- Valet services
- 24/7 onsite security
- Dining options
- Daycare centers
- Lounges
- Private outdoor space
Class B Properties
Class B buildings are sometimes slightly older than Class A but are still well-maintained. These buildings are often downgraded from Class A due to wear or being in a less desirable area. They offer standard amenities suitable for most professional companies, with lease rates that accommodate a range of budgets. While they may not be as luxurious or expensive as Class A buildings, they are just as functional. If your company doesn’t regularly host high-profile clients, Class B buildings are a great option.
Class B amenities may include:
- Onsite parking (Covered or Not)
- Lobbies
- Security
- Break Room
- Conference rooms
- Cafeteria-style or cafe dining
- Shared outdoor space
Class C Properties
Class C properties are for budget-conscious tenants. Class C office buildings are typically 20-25 years old with few improvements. These types of properties are great options for non-profits, startups, or other tenants that prioritize affordability over image or location. Lease rates in these buildings are lower than in Class A and B, often not in prime marketing locations.
Class C amenities may include:
- Onsite parking
- Break rooms
Now, when searching for Class A vs Class B real estate, you know that Class A can be the best that commercial real estate offers. If you can afford average rental rates and want something nicer than Class C, consider Class B buildings. That all being said, if you have a low budget and need a functional space to work in, you should prioritize looking for Class C properties. If you are looking to lease a commercial space in the Dallas or Tulsa area, review our current open spaces!
