a-guide-to-office-building-classifications

A Guide to Office Building Classifications

Whether you’re just getting started in the commercial real estate space, or you’ve already begun investing, it can be difficult to know what to look for.

[Webinar] A Guide to Office Building Classifications

Whether you’re just getting started in the commercial real estate space, or you’ve already begun investing, it can be difficult to know what to look for. Thankfully, there are classifications that narrow down your search immensely and will help you find the perfect investment opportunity.

Office building classifications are pretty straightforward and are either labeled as class A, B, or C. Each of these classes vary among markets and are labeled comparative to other surrounding buildings, so it’s important to thoroughly research the area the building is located in.

Here’s a brief overview of each that can act as a general guide to office building classifications:

Class A

Class A buildings are the best of the best; they’re the newest developments and the nicest spaces on the market. These buildings are typically found in high-end, premium downtown areas. You can find everything from gyms to cafés to on-site parking – many amenities beyond just the office space itself. Because Class A buildings are well-located and are overall top-tier spaces in the market, they have the highest rent and attract high-quality tenants.

A few examples in the Nashville area would be:

  • The Pinnacle at Symphony Place
  • The Bridgestone Tower – Corporate HQ
a-guide-to-office-building-classifications-the-pinnacle-bridgestone-tower-nashville

Class B

Class B is ranked below Class A. These buildings are a little more outdated and aren’t as visually appealing, but still have excellent management and tenants. They are often found in business centers or business parks, outside of the downtown metro area. It’s important to note that there are many Class B buildings in downtown areas, as well, but they tend to be a bit older than Class A. At one point they may have fallen under the Class A category, but over time, they have naturally been outmatched by other brand new buildings.

Class B buildings can be attractive to some investors because of the opportunity to upgrade amenities and restore various features that can bump them back up to Class A.

 

Excelsior 8300 College, Class B: Office Building Classifications

Class C

Class C buildings require the most renovation and work. They’re located in less desirable areas, have little to no amenities and are much more outdated than Class B. I’m sure you’re wondering, then why would anyone invest in Class C spaces? For a few investors, they may be drawn to the opportunity to re-develop or completely renovate the building and see it as a value-add project; however, the location may still remain a barrier to finding tenants.

Now that you have a better understanding of each classification, it’s evident that acquisition costs, desired rate of return and risk tolerance all play a large role in which class is the right investment for you.

If you have any questions or would like to speak to someone on our team, please don’t hesitate to reach out!

Previous Articles

the-ultimate-guide-to-commercial-real-estate-investing

The Ultimate Guide to Commercial Real Estate Investing

Learn everything you need to know to assess the benefits of a commercial real estate investment and make the best decisions to get started.

stabilized-versus-value-add-investments

Real Estate Investments: Stabilized vs. Value-Add

From an investment standpoint, real estate deals can sometimes be defined as either stabilized or value add.

China’s Powerful Economy, Leadership Strategy and Territorial Conquest

China’s Powerful Economy, Leadership Strategy and Territorial Conquest

Will Crampton sailed across the Atlantic when he was 18, and then flew across the Pacific as an exchange student to China in 1986.

China’s Powerful Economy, Leadership Strategy and Territorial Conquest

Go Beyond Marketing and Create a Better Customer Experience

Ashley is the Founder of Clear Start Creative. Joining a startup as the first hire, she had the opportunity to experience first-hand…

Tackling Trends in Accounting and The Workforce Shortage

Tackling Trends in Accounting and The Workforce Shortage

John Bly, the South Atlantic Regional Managing Partner of Aprio, is a frequently requested global speaker and author of “Cracking the Code”

Life-Changing Innovations in the Space Industry

Life-Changing Innovations in the Space Industry

Daniel Kleinmann is an early-stage venture investor at the Explorer 1 Fund. He invests in companies that are fundamental to the success…

collaboration-and-infrastructure-within-the-sports-and-entertainement-industry

Collaboration & Infrastructure within the Sports & Entertainment Industry

He led the acquisition efforts on behalf of investment groups for two Major League Baseball franchises and executed both the acquisition…

inside-look-at-asset-management-today

An Inside Look at Asset Management in Today’s Environment

What does it take to effectively manage financial assets? With the numerous financial instruments out there, how do we determine…

outlook-on-private-wealth-and-family-office-trends

An Outlook on Private Wealth and Family Office Trends

To evaluate whether a family office is a realistic option, you must first understand what a family office is, the fees associated with it…

Excelsior Capital

A real estate private equity firm that owns and operates high quality multi-tenant office assets in emerging secondary markets.

Interested in learning more about Excelsior's investment opportunities?
excelsior-capital-logo-icon-white

Disclaimer

Under no circumstances should any information presented on this website be construed as an offer to sell, or solicitation of an offer to purchase any securities or other investments. This website does not contain the information that an investor should consider or evaluate to make a potential investment. Other materials related to investments in entities managed by Excelsior Capital are not available to the general public.

Excelsior Capital

104 Woodmont Blvd, Suite 203
Nashville, TN 37205

Contact Us