"Class A Office Building" - Not always

This is a term that is liberaly used when describing the class of an office building. Most of the time owners and or their agents just don't understand how office buildings are rated. They also want to portray their properties in the best light possible. However, many of the properties that are described as Class A or really more like B or C.

The class of an office building refers to its ranking in the market, reflected in the level of rental or sales price per square foot it can command. The four classes of office space are:

1. Class A - This class of office building has excellent location and access. It attracts high-quality tenants. It is of superior construction, materials, and finish, and is relatively new or is competitive with new buildings. It provides onsite amenities and offers professional on-site management
2. Class B - This class of office spce has good location and access. It attracts better tenants. It is of good quality construction and may compete with buildings at the lower end of the Class A category.
3. Class C -This class of office space is usually older and lacks some of the features that newer buildings offer. It may also have been affected by economic obsolescence, i.e. - the surrounding area no longer commands top rents). It might also suffer from some physical deterioration.
4. Class D - This class of office space is older, suffering from functional obsolesence and physical deterioration, probably in need of renovation, and likely to be suffering economic obsolesence as well.

Office buildings go through a lifecycle where they devolve over years from Class A to Class B to Class C buildings. If their neighborhood sustains commercial viability, a building may be maintained or renovated and retenanted to sustain Class B or Class C status for many years. If not, they tend to become Class D buildings and might eventually sit vacant or be demolished for re-development.

"Fundamentals still respectable"

Commercial real estate market fundamentals are fairly stable, although investment has decreased following a record year in 2007, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®.

NAR Chief Economist Lawrence Yun said the commercial real estate market is holding essentially even. “We’re seeing no significant changes in vacancy rates or rent growth, so the fundamentals in commercial real estate still seem to be respectable,” he said. “Under normal circumstances, near-full occupancy coupled with positive rent growth would be of strong interest to investors, but we’re not seeing that. The credit crunch has filtered into the commercial real estate market.”

ORHC signs 90,000sf industrial lease

Central Florida healthcare giant Orlando Regional Health Care leased nearly 90,000 square feet of warehouse space in Crownpointe Commerce Center in Southwest Orlando. The new lease at Crownpoint Center IV results in a full-facility occupancy for the newly constructed building.

Maitland office building sells for $53M

The Maitland Promenade building in Maitland was recently purchased by Flagler Development Group for $52.9 million or $230/sf. The property is a 5-story, 230,000sf office building with a 3-story attached parking garage. The property was acquired by its former owner in 2005 at a purchase price of $44 million.

CFCB hired to lease office buildings in Hunters Creek

Central Florida Commercial Brokers was recently hired to lease three new medical office buildings in the Hunters Creek Professional Park located across from the Loop Shopping Center in Osceola county. The buildings total 9,000sf of fully built medical/professional office space with plumbing available in every office. The landlords for the properties include TDM Resorts and Sorrell Insurance Group.

ORHC purchases medical office building

Orlando Regional Health Care purchased a 33,000sf medical office building located near its main campus in the south downtown Orlando area off of Columbia Street and Orange Ave. Columbia Street Partners LLC was the seller in the transaction. The property, which was built in 1994, sold for for $7.9M or approximately $242.