CRE glossary
Class A / B / C office
Class A, B, and C are quality grades for office buildings. Class A is institutional-grade, newer construction, prime locations, full amenities, top-tier tenants, premium rents. Class B is solid older inventory or smaller buildings in good submarkets, typically 15–30% cheaper than Class A. Class C is functionally obsolete or poorly located, typically half the rent of Class A.
Class A buildings are typically less than 30 years old (or fully renovated), located in CBDs or top suburban submarkets, with floor-to-ceiling glass, high-end lobbies, fitness centers, conference centers, and the building services tenants expect (24/7 access, after-hours HVAC, dedicated property management). Rents in Class A run 25–50% higher than the submarket average.
Class B is the workhorse category. Older buildings (often 30–60 years old) that have been maintained but lack Class A finish levels. Some are former Class A from prior decades that aged out of the top tier; others were always Class B by design. Class B rents are typically 15–30% below Class A in the same submarket, and often the best value.
Class C is at the bottom. Older buildings with deferred maintenance, marginal locations, basic mechanicals (no central HVAC, single elevator), and limited amenities. Class C tenants are typically cost-driven small businesses; rents are 50–60% below Class A. The class is shrinking in tier-1 markets as obsolete buildings get demolished or converted to residential.
Example
- Class A NYC midtown
- $95–$150/SF
- Class B NYC midtown
- $65–$85/SF
- Class C NYC midtown
- $40–$55/SF
- Class A SF SoMa
- $70–$110/SF
- Class B SF SoMa
- $48–$65/SF
Broker perspective
Class is set by the listing agent's assertion, not a formal certification, there's no governing body. Push back on any landlord claim of 'Class A' that doesn't match the floor-to-ceiling-glass, 24/7-access, full-amenity reality. A 1985 building with brown-tinted strip windows is Class B, not 'Class A-minus,' regardless of what the brochure says.
Frequently asked
People also ask
Who decides if a building is Class A?
No formal body. The listing agent and broker community classify based on age, location, amenities, and finish level. Disputes are common at the A/B boundary.
Can a Class B become a Class A?
With major renovation, yes. The Manhattan office market has seen dozens of 1980s Class B repositionings get upgraded to Class A in 2015–2024 cycles. Repositioning costs $200–$400/SF.
Are Class A rents always higher?
Yes, within the same submarket. A trophy Class A in a B submarket can rent below a B in an A submarket. Submarket beats class for rent levels.
What's a 'Class A trophy' vs regular Class A?
Trophy is the top of Class A, name-brand buildings (the Empire State Building, the Salesforce Tower). Regular Class A is everything else in the top tier.
Related terms
Base rent
The headline rent before pass-through expenses, usually quoted in $/SF/year and the starting point for every comp.
Rentable vs usable square feet (RSF / USF)
USF is the floor area you can actually use; RSF adds your share of common areas. The ratio between them is the load factor.
Load factor
The percentage of common-area square feet allocated to the tenant on top of usable space, typically 12–18% in Class A office.
Operating expenses (OpEx)
All costs to run the building, taxes, insurance, utilities, janitorial, management, that get passed through to tenants in NNN and modified gross structures.
See class a / b / c office extracted from a real lease.
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