One of the largest and most broad commercial real estate sectors is office space. Office buildings are typically grouped into one of three categories: Class A, Class B and Class C. While standards can (and will) vary by market location, office classifications are important to understand. They allow investors to differentiate between properties they seek to buy or lease. Below we provide a general overview of each classification.
- Class A: The highest category, Class A offices. This category represents the newest and top quality assets on market. Not only are these assets contracted using the best materials and techniques; they are typically the best looking, best located and best maintained. Typically, high quality tenants buy or lease space in Class A buildings. Although, these properties also come with the highest price tag.
- Class B: Next down on the list is Class B. These assets are typically older than their Class A counterparts. But, these offices are still thought to have good quality with professional management and quality tenants. Investors often seek to purchase well-located Class B offices since it often takes just a little bit of renovation and common area improvement to bump a building back up to a Class A rating.
- Class C: Encompassing everything that is not Class A or B, these are the lowest rated office properties available on market. Typically, Class C spaces are older, located in bad areas and in need of considerable upgrades and renovation. In addition, the infrastructure is considered poor and often times the asset’s technology is outdated. As a result, Class C office features the lowest price tag on the market. Also, Class C space can take a considerable amount of time to sell or lease.
These classifications just go to reinforce an important point: not all commercial real estate is created equal. If you’re in the market to buy or lease office space, you have a lot to consider before you sign on the dotted line. Below, we offer guidance to a typical issue our clients encounter when searching for office buildings.
How Much Office Space Do You Need?
First off, offfices can range from as small as 850 square feet all the way up to 20,000 square feet. For this reason, it’s so important to thoroughly determine how much space you need prior to beginning your search. Clients who do this see often see decreased costs, improved operational efficiency and ultimately stay in their location (as opposed to moving every 5 years). To determine exactly how much offices space you need for your business, use our tips and tools below.
Number of Employees:
According to CCIM, the general rule of thumb is to account 100 to 150 square feet for every employee. Amounts broken down as follows:
- Economy: 100 square feet per employee
- Average: 125 square feet per employee
- Spacious: 150 square feet per employee
Needs versus Wants
Next, you need to determine your exact office needs, since every one is different. Do you need a full kitchen, or is a small break room sufficient? How many meeting rooms do you need, or do you prefer open shared workspaces? Do you require a copy room, or can a copier be shoved into reception? Each need breaks down to a specific square footage. So, ironing out the necessities will be super beneficial to determining your square footage range…and monthly rent payment.
Use a Calculator
Now that you have made your list of office needs, room by room, it’s time to add it all up! This office space calculator from Cresa is one of the best and most thorough on market. It allows size ranges for each room (executive to efficient) giving you a detailed look at your square footage requirement.
Hire a Professional
Once you determine the size of the space you need, the fun part begins – finding that perfect space! Our best advice is to never try to buy or lease space without a commercial real estate Advisor. Not only will they guide you through the process and handle all deal negotiations, they have access to the most office space listings on market. This ensures that you see all the options before making a final decision. Contact one our experts today and find your best Hattiesburg office.