Buying a NYC office building is a smart investment. During 2010, New York City had one of the lowest office vacancy rates in the US. Manhattan office space will continue to look attractive to tenants and investors.

Although there is a market for all types of NYC properties, not all office buildings in the Big Apple are equal to one another. Building class definitions categorize office buildings as Class A+, Class A, Class B, and Class C. Commercial real estate agents and owners and managers determine the 'class' of each building. The groups consider several factors to determine the different "classes."

The ratings system encourages standardized discussion about office markets (including individual properties) and the reporting of office market conditions in the varied classes. Yet the Building Owners and Managers Association International (BOMA) is opposed to publishing the classification rating for individual properties.

Keep in mind that class definition is not a science. There is no formal or international standard but the ratings refer to building specifics. The metropolitan base (detailing the main Class A, B, and C definitions) is used within an office space market.

Class B and Class C definitions depend on Class A definitions. A building's classification is relative to other properties in their market. As well, a Class A building in a small town will not share the same characteristics as a Class A building in the heart of Manhattan.

Building Class Definitions

Class A+

•   High-rise building with prime central business

•   Landmark quality

•   District location (the best of the Class A buildings)

Class A

•   Built since 1980

•   Concrete and steel construction – Expert construction

•   Highest quality materials and finishes – Attractive buildings

•   High quality building infrastructure

•   Generally, 100,000 sq ft or larger - Five or more floors

•   Strong identifiable location - Convenient access (public transportation,…)

•   State-of-the-art systems according to BOMA guidelines

•   Business/support amenities

•   Professional manager

•   Premier tenants

•   Highest rental rates

•   Definite market presence

Class B

•   A grade below Class A

•   Slightly older buildings – Good management - Quality tenants

•   Building finishes – Fair to good

•   Good quality systems – not at Class A level

•   Can be targeted by investors planning renovations to restore them to Class A

•   Well maintained – Functional

•   Average rental rates

•   Good tenants

Class C

•   Lowest grade for useable office buildings.

•   Older office buildings (usually, 20+ years)

•   Located on less desirable streets in older sections of the city

•   Higher than average vacancy rates for their market

•   Less impressive architecture

•   Limited infrastructure

•   In need of extensive renovations

•   Antiquated technology

•   Lower rental rates - Difficult to lease

•   Often targeted for re-development

•   Tenants requiring functional space

Besides the above list, tenants must consider other factors.

Additional Factors

•   Security and life safety infrastructure

•   Backup Power

•   Elevator quantity and speed

•   HVAC capacity

•   Floor load capacity

•   Ceiling height

•   Common area improvements

•   Parking

•   Nearby amenities (restaurants, dry cleaning, ATM,…)

NYC real estate is like no other property market. Regardless of class, there is a buyer for every