Looking to understand how commercial real estate buildings are classified? Then keep reading, because In this post, we outline the BOMA classification for office space and explain the differences between each category of building.
A Guide to the Classification of Commercial Real Estate Buildings
Just like any other complex field, commercial real estate professionals use classifications to make sense of things.
Having a system to classify buildings is helpful because it gives everyone involved in the commercial real estate industry a common base to understand the market and discuss potential deals.
The Building Owners and Managers Association (BOMA) classifies office space into three categories:
- Class A
- Class B
- Class C
Keep in mind that BOMA “does not recommend the publishing of a classification rating for individual properties,” as the organization believes that these ratings should be used only to discuss markets and for reporting purposes.
What Are “Class A” Commercial Real Estate Buildings?
Class A is considered the best of the three tiers in the BOMA classification.
These buildings have high-quality finishes, state-of-the-art systems and exceptional accessibility.
Predictably, class-A buildings attract premium users and their rents are above the average for their location.
Some of the amenities one might expect to find in a class-A building include:
- Concierge services
- Covered parking
- Dining options
- Conference rooms
- High-tech systems (elevators, security, HVAC, etc.)
What Are “Class B” Commercial Real Estate Buildings?
If buildings in the A class can be considered excellent, those in the B tier are usually defined as “fair to good.”
Rents for class-B buildings are in line with the average for their area, but well below class-A buildings.
Some of the amenities commonly found in class-B building include:
- On-site parking
- Cafe dining
- Conference rooms
What Are “Class C” Commercial Real Estate Buildings?
Rents for class-C buildings are usually below the average for their area.
These are buildings usually older than 20 years, with few or outdated amenities.
While class-A buildings are built to impress, class-C office space is merely functional, offering the bare minimum an organization needs to run their day-to-day activities.
Disclaimer: This material is for general information and educational purposes only. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.
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