Class A, B and C Office Space Meaning: What the Letters Tell You, and What They Do Not

Who assigns the letters

Nobody official. The owner's leasing team picks a class, listing databases repeat it, and tenants vote with signed leases. The letter tends to follow visible things: the lobby, the number and speed of the elevators, the hours of heating and cooling before overtime charges begin, ceiling heights, and how the owner responds when something fails.

Class A, B and C side by side, and where trophy sits

• Class A: new or thoroughly renovated towers, with the strongest systems and services, at the higher rents.
• Class B: older buildings that are sound and often well kept. Most of Manhattan's prewar loft stock carries a B.
• Class C: the oldest and simplest buildings, at the lowest rents.
• Trophy: the top of Class A. Every trophy building is Class A, and most Class A buildings are not trophy. The premium buys views, amenity floors and the address.

Our market report calls Bryant Park the trophy end of Midtown, which is why the floors below are from there: a neighborhood where tower space and older stock stand close enough to tour in one afternoon.

Which class to tour: two questions tenants ask

Is Class B in bad condition? No. The letter says the building is older and its systems simpler. Many Class B buildings have had one careful owner for decades, and a landmarked loft can be the strongest recruiting asset on its street.

Does a startup need Class A? Usually not. An engineering-led team tends to get more from a full loft floor than from a corporate tower specification, and the difference in rent can pay for the buildout or for hires. A firm that receives clients weighs the lobby and the address more heavily. Class A, B and C works a tower against a loft in full.

What class changes in the lease, beyond the rent

The letter predicts the paper. Class A owners tend to use longer lease forms that favor the landlord, ask for larger security deposits, set stricter rules on subletting and alterations, and quote rent on square footage with a heavier loss factor. Owners of Class B and C buildings are often families, and many will give ground on concessions to land a dependable tenant. These are tendencies. The class on a flyer binds no one, so confirm each service and each charge in the lease, with your attorney.

At the letter of intent: what to settle, whichever class you choose

A letter of intent is a few pages, largely non-binding, that set the business terms before anyone drafts a lease. Have your attorney confirm which of its clauses do bind. Settle these there.

• Base rent and the escalation structure, written out.
• Term, free rent and where the free months fall.
• The improvement allowance or the landlord's work, tied to a defined delivery condition.
• Security: the amount, whether a letter of credit is accepted, and a schedule that reduces it.
• Renewal, expansion and sublet rights.

Class shifts the emphasis. In a tower, press on security and the sublet clause. In a loft that needs work, press on the allowance and the delivery condition. The letter of intent covers the document itself.