What are Office Space Classifications and Deciding Which One is Right For You

Knowing what you want can be difficult when it comes to office spaces for lease, even if you’ve been in the professional world for a while. If you’re starting a new business that needs private workspace and are on a budget, it can be even more challenging.

In addition, office space classifications can be difficult to pinpoint. But you should always know what you’re getting before signing a lease and putting money down.

If you’re unaware that office space comes in different classes, no worries. You’ll soon know enough to determine if the space is right for you and if it fits within your budget.

Classifications of Office Space

Office space can be broken down into three classes or grades. Class A, B, and C. Unlike the grading you got in school, these are looser designations, making them a bit more art than science-based.

Classifications take many things into consideration, including the local real estate market. Each class of office space has primary characteristics that put it into their perspective tier.

Classifying office spaces include:

  • Location
  • Amenities
  • Age of the building
  • Maintenace of building
  • Building infrastructure
  • HVAC system
  • Technology capabilities

Depending on when they’re built, how up-to-date they are, their location, and the amenities are the main differentials between the classes. But let’s go into specifics and what you can have and pay for with each class.

Class A Office Space

Class A office spaces are the cream of the crop. They have the most up-to-date technologies. They’re well-kept, have a ton of amenities, and are situated right in the heart of a business district or other desirable neighborhoods, like a bustling downtown. All in all, it’s the perfect setup for a commercial real estate building.

Take a look over your city. Do you see the high rises in the distance? Have you walked into their lobbies and been almost intimidated by their elegance and luxury? Yeah, that’s a Class A office space.

That does not mean you need to go and get a class A office space right this second. For one, the rent in these buildings is well above average for your city. And for two, since they’re so in demand by large, well-known law firms, tech giants, ad agencies, and financial institutions, their vacancy rate is minimal.

However, that doesn’t mean it isn’t something to strive for in the future. The buildings house the best of the best, and the tenants expect them to stay in pristine condition. In addition, they want to impress their clients and have the money to do so.

What you can expect from Class A office space:

  • Well-decorated with high-end finishes
  • On-site building management
  • Security
  • Large central lobby
  • Fast Wi-Fi
  • Up-to-date HVAC system
  • Parking garages or some type of covered parking
  • On-site mailing office

That is the minimum you can expect from a Class A office building. However, an office space for lease that has attained a Class A rating will typically offer much more than that as they want those high-paying tenants to fill their floors.

Some amenities that Class A office spaces might offer are:

  • Fitness Centers
  • Pools
  • Spas
  • Restaurants
  • Cafeterias
  • Indoor atriums

Class A office buildings are willing to pull out all the stops to get those high-profile tenants, whether that’s a skyscraper or a sprawling office campus. Some things you won’t find in a Class A office space are reduced rates and the ability to sublease a space since Class A’s are so in demand and the competition is quite fierce.

It’s also not uncommon for some of these skyscrapers to only have a couple of reputable companies before they’re at max capacity.

Class B Office Space

Class B office spaces are older buildings that aren’t as kept up as Class A buildings. It’s not uncommon for a Class B to have been a Class A at one point in time. They may not be in the heart of the best neighborhoods, but they’re still prominent enough to attract good business.

Class B buildings are considered average to above average and don’t have the high price tags that Class A does. However, they’re still perfectly functional and have the right amenities to draw in plenty of well-known tenants.

What you can expect for a Class B office space:

  • Comfortable and elegant with nice finishes
  • A property manager
  • Usable HVAC system
  • Small lobby

They aren’t as up-to-date and don’t have the technological capabilities as other office spaces. Still, they’re able to function very well. Class B office spaces also tend to have smaller buildings, typically no more than four stories high.

There may be security, but there may not be and don’t expect an entire wall of swanky elevators in Class B office buildings. Also, expect signs of wear and tear to be a little more apparent. As for parking, there may be a parking lot that you can use, but don’t expect covered parking.

With some remodeling, tenants or investors can bring up Class B office buildings to Class A level. They can make it look new and add in all the high-end finishes expected from a Class A.

You can find some Class B office spaces on the fringes of the business district or downtown. Still, you’ll find many Class B buildings in the suburbs for those that don’t want the bustle of the business district.

Also, make sure there’s some wiggle room in the lease to renovate the space to fit the look of your business.

Class C Office Space

Class C office spaces are purely functional with no frills attached. They’re considered a good fit for those just starting a business, have a strict budget to stick to, and want private office space. If that’s not your thing, try a coworking space, it’s nearly as good but with less privacy.

These buildings are at least 20 years old and located in less than desirable neighborhoods or further out from the business district. They are a fraction of the price of Class A and Class B office spaces. However, you get what you pay for.

What you can expect from a Class C office space:

  • No lobby
  • Outdated
  • Slow elevators if there are any
  • A space to fit a few desks and a coffee pot, maybe a mini-fridge

If you’re starting a new business venture and need a place of your own to do business out of, then this is the way to go. Of course, you can always upgrade as you grow.

Do not expect a receptionist, on-site parking, or even central air with these buildings, as they usually need extensive repair work if not a complete overhaul.

These buildings are perfect for investors looking for commercial real estate to buy and renovate. Renovations can bring a Class C up to a Class B building, but don’t expect it to ever get to a Class A as they aren’t in the desirable neighborhoods.

Considerations for Which Class To Strive For

Out of everything shared with you, there is one thing you have to remember. These class ratings are subjective. For example, a broker could think that an office space for lease is a Class A while the potential tenant thinks it’s a Class B.

You do not need an “A” grade to have a perfectly good business that brings in clients and continuously grows. There should be no stress to get the top-of-the-line building that will see your company go under in less than a year.

Each class of office space caters to different business categories and competes for completely different types of tenants.

Class A, of course, is going for the tech giants, the big law firms, and any business that needs to wow their clients and has the money to back up a Class A office space.

Class B is a solid option for businesses needing a professional workspace with enough flexibility in remodeling the offices themselves.

Class C is for those that need a space to set up shop while they grow their business, and there’s nothing wrong with that.

So, which class should you strive for? It all depends on where you’re at with your company and what you need out of the space.

Now that you know what class of office space you’d like, it’s now time to determine what office space type you want to go for. There are plenty more options to choose from. Isn’t running a business fun?

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