Guide to Office Building Classification

Grade A buildings are those that enjoy a premium over the average rent prevailing in the area. Here’s all you need to know about Office Building Classification.

One of the crucial steps to take before investing in real estate is to do a thorough real estate market research of the city where you are planning to buy a property. It is far easy to study market trends, compare sale prices, and gain an overall perspective before deciding on what works best for you in today’s digital age. It allows you to make error-free decisions and gauge an understanding of when, how and where to invest. Deciding on the right city is also an important decision. Everything comes into interplay here – the economic and infrastructural developments in the region, road, highway and expressway connectivity, and the property’s strategic location.

Grade A

Grade A buildings are those that enjoy a premium over the average rent prevailing in the area where they are located because they a usually newly built and have all the requisite infrastructure. These buildings are the best looking buildings of the city and have very good amenities. They conform to all the legal requirements of the zone of the locality where they are constructed and also have features like fire prevention system, fire management system, earthquake resistant structures etc.

Grade A commercial property spaces have very good security features and a tenant can be free from any headache that may arise in day to day operations. These buildings are professionally managed and have adequate parking for all the corporate tenants, their employees and their guests who may be visiting from time to time. In the Western Countries like USA or UK, these buildings usually have a size in excess of 2 lakh square feet. However, in India these buildings can be smaller of the size of 1 lakh square feet or so.

Grade A commercial buildings get famous corporates as tenants and often compete among each other to house the biggest of the companies. These buildings also have start of the art HVAC (Heating Ventilation, Air Conditioning), very safe elevators and outstanding concierge services. The utilities like water and electricity is extremely efficient. The architecture of such buildings like Grade A office spaces is also noteworthy, conforming to latest design efficiency standards and adequate ventilation and natural lighting provisions. These buildings often have cafeteria, food court, restaurants, ATMs, coffee shops etc. They are usually found in central business districts and in global cities like London or New York, they might even have large open spaces or greenery or some kind of landscaping. However, In Mumbai or Delhi, Garde A buildings usually do not have much of landscaping or greenery but conform to other standards.

Grade B

These buildings are not as centrally located and are usually not architectural marvels but still have professional management and decent location. These buildings have elevators that do the job but are not start-of-the-art. These buildings may compromise a bit on the shine and glitzy part. They are usually older than Grade A buildings and almost always have had tenants earlier that have now moved out. These buildings do not compete amongst each other to get Fortune 500 companies as tenants and the water and electricity systems are neither faultless nor super-efficient. They may not even have modern sophistication like earthquake resistant structures and waste recycling units. These buildings thus command rent which is average rent of the area where they are located. These buildings may also compromise on the parking area, having just enough for the employees of the corporate tenants and not for their guests. There are minor repairs required from time to time but overall construction is satisfactory. The security arrangement is adequate but not hi-tech. The building would have middle sized companies as tenants and there may or may not be café, restaurants and food court.

Grade C

Grade C Buildings would be compromising on several factors like parking and security. There will be no café or restaurant inside the premises. There would be frequent repair work but not to the extent that the building will not be inhabitable at all. The parking will be uncovered and usually not enough to accommodate vehicles of all the employees of the corporate tenant. For a tenant that gets a lot of quests or visitors, Grade C building may not be ideal because of parking and other issues. These buildings are usually the oldest building of towns and are as far away from architectural marvels as they can be. There will be no lobby area and may not even have elevators in the Indian context (Delhi Mumbai, Kolkata and Chennai). However, in Western countries, even Grade C buildings will have a lobby and elevators. The rents of these buildings are at the lowest end of the bracket. Grade C buildings are suitable for back-end operations of companies where there is little or no client interaction required. In certain Grade C buildings in Delhi, Mumbai and Kolkata, the requite permits from the fire departments may not be there at all.

These are just general descriptions and are somewhat subjective. You must look at your immediate requirements and suitability. Sometimes Grade B or Grade C buildings are the need of the hour for a businessman or a company and stretching to occupy a Grade A will not make sense otherwise it will start affecting the bottomline of the company.