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Office Building Classifications and How To Understand Them


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If you’re interested in moving to an office or buying up some office property then you need to know the differences between the levels of office building classification. Whether you’re looking to expand from your current office or you’re looking to move into one for the first time, it’s important to know the classifications. Have a look at this guide for a simple explanation about the levels and what they mean

 

Office buildings are usually classified in one of three grades (A, B and C) and in some places, they might have extra classifications (like A+ or C- for example) that might let you know a bit more about the building. The classifications are standard but they can vary from area to area. A Class A building in Toronto is much different than a Class A building in a small rural town. 

 

Let’s have a look at each building classification by grade so you can see what each one usually features. Keep in mind that this is a rough guide and each area has its own standards. 

 

Class A Office Buildings

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If you’re looking for a top-of-the-line building that has been upgraded and well maintained then Class A is what you want. These buildings are great for companies who are looking to entertain clients often and want the highest standard for their office space. They will often be higher in rent or purchase price but it’s a great way to get your business off to a good start in a well-maintained office space. 

 

Some of the features that a Class A Office Building might have include

 

  • 24/7 Security or a secure entry 
  • Strong location
  • Large enough to accompany many companies
  • State of the art systems that are upgraded often
  • Various areas for parking
  • Built by a reputable and well-known developer 
  • Managed by a professional company 
  • Modern or upgraded architecture 
  • Clean and well maintained
  • Up to date certification and building inspections
  • A large floor plan that’s easy to design with 
  • Extra multi-use floors and rooms (mailroom, conference room, kitchen etc.)

 

Some buildings may not have every feature on the list but they are still considered a Class A for other reasons. If you want the best building in your area to bring your business to then Class A is your best bet. These builds require little to no changes and they’re often move-in ready. 

 

Class B Office Buildings

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Class B buildings are commonly buildings that were once considered a Class A but over time, they have depreciated in value. There are many different reasons a building may be downgraded and many of them are an easy fix if you’re looking to buy a building and upgrade it. These are great investment pieces if you want to expand your portfolio while collecting rent. 

 

Some of the features that a Class B Building might have included are

 

  • Slightly older than other office buildings in the area
  • Old and outdated architecture or floor plan
  • Working quality systems (heat, electric, wifi, etc.)
  • Limited or no parking available 
  • Average rental rates
  • Maintained at functional quality level (no repairs needed but no upgraded made either)
  • Smaller office spaces
  • Located in an average part of the neighborhood

 

These are great places for anyone who’s looking for a place without all the bells and whistles. If you have a start-up that still wants enough space to spread out or you’re currently working from a Class C building and you’re looking for an upgrade then look into Class B Buildings in your area. 

 

Class C Office Buildings

office space

 

Class C Buildings are great for short-term tenants or anyone who has enough capital to upgrade it and turn it into a higher class building. These are often some of the oldest office spaces in the area and they might have areas that need to be upgraded before a modern office can move in for the long term. 

 

  • The oldest office spaces in the neighborhood
  • Outdated floor plan and design
  • Lowest quality systems that may need to be repaired or upgraded (heat, electric, wifi, etc) 
  • Obsolete systems that will need to be removed and replaced 
  • Located in a less desirable area of town
  • May need structural repairs
  • Very limited or no parking available for staff and any visitors
  • Low rental rates with a high turnover of renters
  • No extra rooms 

 

Class C buildings are a bigger investment than a Class B Building because they usually require many more upgrades and repairs. On the other hand, they are great for investors looking for a “bare-bones” office space that they can transform completely. 

 

Rent vs Buy

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If you’re a small company that’s just starting out and you don’t have the capital to rent out a large building then going with Class B is probably your best bet. It’s reliable and the building will serve you well at a modest rate until your business grows and expands. Class C is another good option due to the low rent but you need to make sure the building is able to accommodate your business needs. 

 

If you want to invest in a property and build it back up again, then you’re going to be looking for Class C buildings or Class B buildings. These are great investment opportunities, especially if they are worn down but still in great areas. 

 

If you have the funds to buy the building outright and use the floors the way you want then you want to scout out the Class A or B buildings in your area. There will be little to no repairs or upgrades so it’s easy to move in as soon as possible. 

 

Understanding the different classes is one of the first steps to buying a commercial  or renting an office building. Once you understand what your business needs from a building then you can figure out which class will work best for you. Making the right choice will give you and your business success in the future. 



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