COMMERCIAL REAL ESTATE TERMINOLOGY & DEFINITIONS
Office buildings range from small, owner-occupied properties to multi-building office parks. Below is the
industry’s classification of office property.
Class "A" - A building with excellent location, high quality tenancy and superior maintenance. Building
must be superior construction and finish, relatively new or competitive with new buildings, and providing
professional on-site management. These properties are within the top percentage of the overall market
Class "B" - Building with average to above average location and tenancy quality. Minor functional
obsolescence. Can compete with low end of Class A.
Class "C" - Building with average to poor location, management, design and tenancy quality. Generally
an older building with growing functional land, economic obsolescence and/or deterioration.
There are several different classifications of industrial properties. Such uses are: manufacturing, processing,
storage, distribution, research and development. Warehousing is included in the industrial classifications
and most have a small percentage of offices in the building. Office/Warehouse properties are typically
flexible, general purpose buildings that can be changed to a small user needs. Below are the categories for
1. The Heavy Industrial segment is made up of manufacturing properties. Typical users would be the auto
industry, textiles, steel and chemicals. Office space is usually zero to five percent of the building.
2. The Light Industrial/Assembly facility usually has production lines that assemble components. Office
space is usually 10 percent or less.
3. Warehouse/Distribution is the least intense industrial use. Comparable to light industrial/assembly
property, office use is limited to management task for the distribution or warehouse facility, or about 15
percent of total space.
4. Office/Warehouse or Research & Development broadly define the wide variations in markets throughout