When searching for office space, companies must first have an idea of what type of building is needed, not just the square footage. Before starting to search for the perfect office space and beginning commercial lease negotiations, it is important to understand that there are different classes of office buildings. Since each class of building brings with it various features and amenities, a business must outline their expectations ahead of time and determine how much they will pay for such space.
To aid in the communication between brokers and tenants and each ones expectations regarding various buildings, those looking for corporate space to lease should know the basic differences between the following three classes of office buildings:
Class A – These buildings are of the highest quality, in the best locations, and have the best accessibility. They are an elite class of corporate property that attracts top companies and other types of prestigious tenants. Class A buildings are usually taller, more striking, and have more luxurious material, such as glass exteriors, substantially larger numbers of windows, deluxe elevators, dining areas, coffee and convenience shops, 24-hour access and security, health centers, child care, valet parking, concierge services, conference accommodations, parking garages, and the most modern technology. Architectural designs are fresh and interior spaces usually include hardwoods, expensive carpet and tile, built-in reception, and stainless kitchens. They make up less than ten percent of the commercial properties in cities across the country and are usually located in the heart of the business district. They also demand fees that are well above current market rates, with little room for commercial lease negotiations.
Class B – These buildings account for most of the corporate properties available. They are mid to higher-grade buildings with various architectural styles. Exterior and interior finishes, amenities, and technology are all in good condition. Their location varies from inner-city areas near public transportation to more suburban areas. Most businesses can find a professional quality office space that lends to their credibility and creates a good impression. Some include 24-hour access and security, dining, on-site administration, conference halls, etc. Overall, Class B space seems to be the trend setter for building style, condition, inclusions, and sets the going market rate.
Class C – These buildings account for the older, smaller, and architecturally out-of-date properties in the commercial real estate market; however, Class C buildings still serve their purpose. They are great for companies just starting out or those where location is not critical. They are not fancy and usually in need of renovation or redesign. They look and feel older in comparison to the other two classes. These buildings may be in older parts of the city or away from transportation and come without any frills. Because of this, Class C properties also lease for below average market rates.
It is impossible to classify every amenity and quality of various commercial properties; however, the descriptions provided above should provide a base of reference for those looking for office space. Having an approximate idea of the different features and condition of each building type will help prevent companies from needlessly visiting inappropriate properties and should help with commercial lease negotiations as well!
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