The term “Class A space” used to have a certain cache. As office space becomes increasingly commoditized, you have to examine where your building is positioned to attract or retain Class A tenants.
Let’s skip to the punch line: Class A is, ultimately, in the eye of the beholder. In other words, the important elements of a desirable Class A building will vary from one tenant to the next.
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However, there are arguably 10 key elements universal to all Class A products:
Location: Translated as “proximity,” not only to amenities and public transportation but also to such places as public parks — and, for better or worse, the food trucks parked there. Another aspect of location is a place or entity that defines the location, such as proximity to the White House or the U.S. Capitol. Also, as the tenant base shifts geographically — following new development — a location can go from A to B, and vice versa.
Age: Better stated as “condition relative to age.” While new is almost always a characteristic of A buildings, old doesn’t always translate to a lower class of building, unless that building is showing age in a way that is detrimental to tenants.
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Amenities: Whether actually used by tenants, Class A building amenities range from the necessary (like parking and security) to the nice-to-have (a rooftop deck or fitness center for example), making this element perhaps the greatest potential point of differentiation from one building to another. Further, as to the location element above, amenities within a short walking distance of the building are equally important.
Style: Is it an iconic building? Is it a landmark? Does the style both on the exterior and interior stand the test of time? Or is it stuck in a particular genre that has lost its polish or popularity? Was the building designed by an architect who enjoys an excellent reputation in your market?
Building systems: Most notable among these are efficient, reliable and controllable HVAC; high-speed elevators that are sufficient for the volume of workers; fire; life-safety and security.
Building finishes: In both public areas and office interiors, finishes must be of quality appropriate to the building, as well as the demands of the tenants who dwell there.
Functionality: This catch-all category can include column spacing, depth from window to core, ceiling heights and LEED rating. Which begs the question: Is LEED a function or a finish? The answer is both.
Rental rate: Class A and Trophy properties are rightfully priced at the top of the market — which tends to be a strong determinant in the next element …
Tenant roster: Generally, you will find the tenants paying the highest rents to be of similar ilk in their desire to provide a high quality of work life for their employees and a high-quality environment for their clients and visitors, and project a Class A image.
Ownership and management: Speaks for itself: the name, reputation but mostly the consistency of building quality and management behind the name.
Building Owners and Managers Association International (BOMA) defines Class A buildings as the “most prestigious buildings competing for premier office users with rents above average for the area” and as having “high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.”
While BOMA discourages the publication of a classification rating for individual properties, it goes on to state that “(building) classes represent a subjective quality rating of buildings which indicates the competitive ability of each building to attract similar types of tenants.”
CoStar not only lists buildings under the three classes (A, B and C) but also employs a national star rating system. CoStar makes the distinction between the two this way: “The Building Rating System differs from the A, B, and C classifications, which are predominately local indicators of quality within a particular market. A CoStar Building Rating is intended to be comparable between markets and to be consistent nationally … The Building Rating System focuses on the quality of the physical attributes of the property, independent of the location.”
Why is all this important? And what can you do to assure your Class A building has the greatest degree of “A” in the eyes of the tenants?
Start by asking them. Pay attention to where they landed — and why — if they leave your building. Pay attention to which elements attracted them to move to your building.
Pay attention to what the competition is offering. Then offer a little more.
Steve is Senior Vice President of Colliers International in Washington, D.C. Having worked for both owners and occupiers, he writes about regional and national business trends. In his spare time, Steve is an accomplished cook and is also putting the finishing touches on his first movie screenplay. Connect with Steve on LinkedIn.