WHen I am looking through commercial real estate listings they are categorized by different classes (A,B,C,F). Can someone please explain to me what are the differences between these classes?
Thanks
“A” is nice, upscale, high rent units.
“C” are dumps.
no owner EVER tells you that he has “C” property.
and since there are no “standards” of what, exactly, constitutes what, you can never be sure that what’s being reported is accurate. Always look with your own eyes.
Generally they are used to describe the characteristics/quality of a building and also the characteristics/quality of a neighborhood/submarket.
For instance when I was working in NYC, my office was located on Madison and 40th St… A-A+ location.
The building though was a bit outdated. Needed new elevators, had older non-optimized floorplans, and needed some all around general upgrading… it was a C-B quality office building. About 10-20 mil was needed for upgrades to make it a high level B to an all around A office property.
Oh, and PS… commercial lenders will have different lending rates based upon the overall grading of a property and it’s corresponding neighborhood.
I know F stands for “NFW” whether you are a lender or investor.