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Class B is ranked below Class A. These buildings are a little more outdated and aren’t as visually appealing, but still have excellent management and tenants.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

using-ira-funds-to-invest-in-alternatives

Using IRA Funds to Invest in Alternatives

Using IRA Funds to Invest in Alternatives. In this blog, we’ll highlight one of the lesser known investment vehicles…

understanding-triple-net-leases-blog

Understanding Triple Net Leases

A triple net lease, often shortened to “NNN Lease”, is probably a term you’ve heard thrown around in the commercial real estate space.

the-rise-of-meme-stocks-blog-news

The Rise of Meme Stocks

To dive deeper into what’s fueling the momentum in meme stocks today, we brought together industry experts for a live webinar discussion.

real-estate-syndications-vs-funds-excelsior-capital-nashville

Real Estate Syndications vs. Funds – Which Should You Invest In?

Real estate syndications and funds are two excellent entry points into the world of commercial real estate, but is one better than the other?

tokenization-of-real-asset-investing

The Tokenization of Real Asset Investing

With the arrival of blockchain technology, those in the commercial real estate space are witnessing a transformation that’s expected to…

great-to-live-bad-to-buy-commercial-real-estate-tips

Why Some Places are Great to Live but Bad to Buy

Though population growth is something to consider with each commercial real estate investment, it doesn’t entirely predict where your next…

beyond-e-commerce-trends-driving-industrial-logistics-development

Beyond E-Commerce: Trends Driving Industrial & Logistics Development

E-commerce has been a main driver behind this positive pattern. Beyond E-Commerce: Trends Driving Industrial & Logistics Development

tips-for-sourcing-commercial-real-estate-opportunities

3 Tips for Sourcing Commercial Real Estate Opportunities

One of the first questions that most commercial real estate investors have is: How do you source new opportunities?

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