The class of an office building is defined by the building’s characteristics. Let’s discuss this really is further detail.
Class A Buildings
To categorize a structure as a Class A building, it must be brand new or, at minimum, have been integrated this current building cycle. It has all of the bells and whistles that the best buildings around include. It’s typically downtown, usually a high-rise, and it doesn’t have functional obsolescence. On top of that features, it’s the highest rent tier. Currently in Orlando, Class A buildings are between $25 and $30 a square foot, while Class B buildings are between $18 and $23 a square foot. Spot the gap of several dollars between those two tiers – that’s typical in your community, too. You know the class of a building instantly by the rent per square foot as compared to other building rents.
Class B Buildings
Class B buildings are often over eight years old or older, depending on your neighborhood. If the current building cycle you’re in is only 3 to 4 years old, a five or six-year-old building could be Class B พื้นที่ให้เช่า. Essentially, it’s not the age of the building that is so important, because buildings don’t age quickly. Oahu is the systems within these buildings.
If it’s a five-foot hallway in place of six feet, that is a Class B building. People will feel this way about this, because nobody built six-foot hallways until fairly recently. Now, if they were like hospital corridors with that extra one linear foot, it just feels much more luxurious.
Class C Buildings
In Orlando, a Class C building could be a lot more than 17 to 20 years old. This really is an example, and understand that drops in class will soon be different based on the building cycles in YOUR area. This is very important to know when trying to define the class of an office building.
A Class C building would have additional and certainly more functional obsolescence than the usual Class B building. Functional obsolescence may also be present in areas like the hallways, where you’d have 4 feet or less of hallway. If you have a building with 3- 4 foot hallways, you feel closed in, since you are so used to the newer buildings having five and even six foot hallways.
If no buildings over the past building cycle were integrated your town with six feet hallways and you walked into a building like this, you’d be surprised at the impact that it is wearing the visitor. It doesn’t cost the builders much to achieve that, however it lends an upscale feeling to the building.
Class C buildings are older, with a lot of functional obsolescence and with systems needs to wear out. Maintenance on a Class C building costs a great deal more than the other two categories.
Once the restrooms are between floors, it’s a hard thing to correct because you’ve to move up or down half a trip of stairs to get there, typically using the fire stairs. Not merely is that not ADA compatible, but it’s inconvenient and outdated. That one functional obsolescence immediately marks the building as Class C.
You could own some buildings you would have to classify as Class C buildings, if you’re going by their age. However, they could still command high Class B-rate rents. This difference just depends on how you maintain your property. Today, if you get a Class A building in Orlando, Florida, you’d pay the same of a 6% “Cap Rate”- in other words, you should not buy one because there’s more bang for your buck as of this writing in older buildings.
It is no economically sound investment. However, you certainly can do fairly well with a Class B building. If you get it on a 9% “Cap Rate”, the investment will likely produce cash flow for an amazing amount of time.
Tip: Office buildings work for decades and more, especially if they’re built correctly. Therefore, the largest bang for your buck is from the Class B building, since it will soon be that class for quite a while if it’s well-maintained.
Remember that the class of an office building is defined by its characteristics and not only by when it absolutely was built. I hope this information can help you broaden your knowledge on the best way to define the class of an office building.Read More