Building Classifications; Class A, Class B, Class C

Building Classifications;  Class A, Class B, Class C

When considering office space, tenants will find that office and industrial buildings are generally classified as being either a Class A, Class B, or a Class C building. The difference between each of these classifications varies by market and class B and C buildings are generally classified relative to Class A buildings. Building classifications are used to differentiate buildings and help the reporting of market data in a manner that differentiates between building types. That said, there is no definitive formula for classifying a building, but in the general characteristics of each are as follows: 

Please see http://bryan-cole.com/MarketIntel.html for market information broken down by Class of Buildings.

The Classifications below are how we typical classify buildings in the local and regional market.

Class A.  These buildings represent the highest quality buildings in their market. They are generally the best looking buildings with the best construction, and possess high quality building infrastructure. Class A buildings also are well-located, have good access, and are professionally managed.

Class B. Class B buildings are generally a little older, but still have good quality management and tenants. Often times, value-added investors target these buildings as investments since well-located Class B buildings can be returned to their Class A glory through renovation such as facade and common area improvements. Class B buildings should generally not be functionally obsolete and should be well maintained.

Class C. The lowest classification of office building and space is Class C. These are older buildings (usually more than 20), and are located in less desirable areas and are in need of extensive renovation. Architecturally, these buildings are the least desirable and building infrastructure and technology is out-dated. As a result, Class C buildings have the lowest rental rates, take the longest time to lease, and are often targeted as re-development opportunities.

The items above are general guidelines to building classifications.  There are no formal standards when classifying a building.  A Class A Building in Reading may not necessary be a Class A building in Philadelphia.  One of the most important things to consider about building classifications is that buildings should be viewed in context and relative to other buildings within the sub-market.

When considering a classification of an Office or Industrial Property keep the following items in mind.

Office Buildings
Visual Appeal
Location
Access (Major roadways, public transportation)
Data and IT Infrastructure
Elevator quantity and speed
Construction, Common Area Improvements
Parking
On-site or nearby amenities (dining, financial, hospitality, dry cleaning, etc.)
Ceiling Heights
Backup Power
HVAC Capacity
Floor load capacity
Security and life safety infrastructure
Lighting


Industrial Buildings
Visual Appeal
Location
Access (Major roadways, public transportation)
Infrastructure
Docks
Overhead Door Access
Column Spacing
Ceiling Heights
Amenities (Battery Chargers, Wash Bays, etc.)
Office Space
Trailer Parking – Car Parking
Water and Sewer Capacity
Construction, Common Area Improvements
Backup Power
HVAC Capacity
Floor load capacity
Security and life safety infrastructure
Lighting

For More Information please contact:

For More Information about Local News, Market Intel, or Commercial Real Estate Opportunities.  visit www.Bryan-Cole.com

Bryan E. Cole | Team Leader
NAI Keystone Commercial & Industrial, LLC
direct: 610-370-8502
Bcole@naikeystone.com

Check out my new website at www.Bryan-Cole.com

NAI Keystone is a full service commercial and industrial real estate firm located in Reading PA; representing buyer, tenant, and landlord representation throughout Pennsylvania.

Greater Reading Office Market Report End of Year 2010 Report

 

By Bryan E. Cole

The 2010 Greater Reading Office Market was much more active than the previous year although vacancy rates still increased throughout the local market. This was due to the majority of the deals taking place being from within the county. The office market continued to experience both companies downsizing along with relocating their existing offices to take advantage of the decreasing rates and increase in incentives.

The good news is that there were a number of companies who increased their footprints including The Reading Hospital and Medical Group, UGI, and C&L Group. This is good to see in a market which has experienced less than favorable absorption rates within the past few years. Unfortunately due to a number of companies closing operations locally the absorption rate for 2010 still maintained its negative status, however it could have been much worse if those companies did not expand.

The end of year 2010 showed a slight decrease in Suburban Class “A” building Vacancies starting at 12.5% in late 2009 and closing at 12.4%, mostly due to a new build to suit for the Reading Hospital and Medical Group, along with companies increasing their footprints at 1 Meridian Blvd in Spring Ridge and The Wyomissing Corporate Campus in Wyomissing. Class “A” buildings have typically been a safe sector in the marketplace because of low inventory; however with new developments coming on line, and companies looking for lower rents the Class “A” sector may see less demand, greater competition and potentially more vacancy.

Class “A” rental rates in 2010 remained stable with rates ranging from $15.50 - $16.75 (Triple Net) on the high side; however there was considerable downward pressure on pricing within this segment.

The Class “B” sector experienced the same issues in 2010 as did Class “A”, starting at 13.7% and ending at 13.6%, however while vacancy rates decreased, rental rates remained steady. Base rental rates within this sector range from $8-9 per square foot and tops out at $12-13 per square foot with gross rates coming in around $15-16 per square foot! Recent absorption has come mainly from expansion of operations by companies already in the market.

Downtown City of Reading, although has seen some new deals consummated, like the Greater Reading Chamber of Commerce, Greater Berks Development Fund and Berks Economic Partnership leasing space at 201 Penn Street, the market remains flat due to these companies coming from existing space within the City. Buildings that have seen vacancy for some time, including 645 Penn Street and 501 Washington Street are starting to show some signs of hope due to new management and ownership changes taking effect. Owners and tenants are continuing to struggle with high parking costs and security concerns, which are continuing to be addressed by a committed City Administration.

Downtown City of Reading vacancy rates continue to increase in late 2010 with rates rising 15.6% to 20.7% in Class “B” Product with much of the vacancy continuing to surround large blocks of contiguous space.

The City of Reading and economic development groups have been working hard to improve and revitalize Downtown which shows in the number of projects underway. The new IMAX Theater and the nearly completed addition to the Reading Eagle Headquarters in the CBD are welcome entrants to the market and kick off a multi-million dollar main street corridor project that includes a new $67 million Doubletree hotel and garage project across from the Sovereign Entertainment and Expo Center. This will help attract a more vibrant restaurant and entertainment segment with increased amenities and ultimately assist to bring tenants back downtown while decreasing vacancy rates and increases in the tax base.

2011 is showing some signs of hope, with new tenants entering the market place, and rental rates continuing along a steady course.

Deals will continue getting done because landlords are reacting to current market conditions, which means companies are getting favorable incentives, such as introductory rates, rent abatements and additional tenant improvements. Also, landlords are now offering tenant improvements and incentives to keep their existing tenants.

Check out my blog at www.Bryanecole.wordpress.com for more market information and updates within the Greater Reading Office Sector along with checking our website at www.Bryan-Cole.com

Written and compiled by Bryan Cole of NAI Keystone Commercial & Industrial, LLC

www.Bryan-Cole.com | www.naikeystone.com | 610.779.1400 | Bcole@naikeystone.com

Board gives push to zoning change

 

By The Reading Eagle Company

The Perry Township Planning Commission is recommending that the township rezone a 15-acre parcel at Routes 61 and 662 to commercial from light industrial.

The 4-1 vote Wednesday begins to pave the way for a retail complex on the northeast corner of the intersection. Edward J. Walsh IV of McCarthy Engineering Associates, West Lawn, said Shoemakersville developer Eugene Bell hopes to build several stores and retail shops at the northeast corner.
The other corners are zoned commercial and have restaurants and a convenience store with gas pumps.

Walsh said Bell owns 38 more acres and they would remain zoned light industrial.

The land is adjacent to a residential development, proposed by Bell, of more than 100 units.

Planner Nancy A. Rogers voted against the rezoning, but did not say why. Planners Richard A. Furnanage and Alton Rohrbach were not present.

In other business, township Engineer Joseph H. Body said that preliminary plans for a commercial center just west of Route 61 are not ready for approval.

Body said a proposed design for the 16-acre parcel, just north of the former Boyer's Food Market and near the Shoemakersville pool, needs to show improved access for tractor trailers.

"If people can't get in, the business will lose out," he said.
Grant T. Smith, senior project manager with Stackhouse Bensinger Inc., Sinking Spring, said that the plan design would be revised.

Smith said the Federal Emergency Management Agency recently approved the building of a planned driveway across a stream tributary just east of Market Street.

Owner-developer Scott G. Homel of Jenkintown, Montgomery County, said he has reserved sewage treatment capacity at the Shoemakersville sewage treatment plant and wants to proceed with the project as soon as possible.

A convenience store and pharmacy are planned on the tract, he said.

For More Information about Local News, Market Intel, or Commercial Real Estate Opportunities.  visit www.Bryan-Cole.com

Bryan E. Cole | Team Leader
NAI Keystone Commercial & Industrial, LLC
direct: 610-370-8502
Bcole@naikeystone.com

Check out my new website at www.Bryan-Cole.com

NAI Keystone is a full service commercial and industrial real estate firm located in Reading PA; representing buyer, tenant, and landlord representation throughout Pennsylvania.

 

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East Penn acquires former Caloric site

By The Reading Eagle Company

East Penn Manufacturing Co. Inc., near Lyons, has purchased the Maulfair Medical Center building at 403 N. Main St., Topton.
According to documents filed with the Berks County recorder of deeds, the price paid was $1.95 million.

Daniel R. Langdon, East Penn's president, said the property is contiguous to the company's distribution facility.
Langdon said East Penn likely will use the property for office space, but has no firm plans for it at this point.

The property, on about two acres, was a part of the former Caloric Corp. , which closed in July 1991 after more than a century in the borough. Caloric was an appliance manufacturer.

Langdon said East Penn over the years has acquired most of the former Caloric property from Raytheon Corp., which bought Caloric in 1967.

"We have substantially all of it," Langdon said, adding that East Penn made its initial purchase of Caloric property in 1996.

That was the same year that Conrad G. Maulfair Jr. and his wife, Coleen M. Maulfair, of Maulfair Medical Center purchased the Main Street property.

It also was the same year that the Department of Environmental Resources released Raytheon from liability following its cleanup of the site.

In the 1990s following the plant shutdown, Raytheon spent more than $7 million on the cleanup.

Contaminants included chromium deposits in the soil and PCE, or perchloroethylene, in the groundwater. Both are considered cancer-causing chemicals. Underground storage tanks also were removed.
Kevin Sunday, a spokesman for DEP's southcentral regional office, said the property was cleared for groundwater, as well as for metals (including chromium and copper) and chlorinated solvents that had been in the water.

Langdon said East Penn conducted an environmental study of the property before buying it.

Coleen Maulfair said the medical center is still in the Main Street property and is leasing space from East Penn.



For More Information about Local News, Market Intel, or Commercial Real Estate Opportunities.  visit www.Bryan-Cole.com


Bryan E. Cole | Team Leader
NAI Keystone Commercial & Industrial, LLC
direct: 610-370-8502
Bcole@naikeystone.com

Check out my new website at www.Bryan-Cole.com

NAI Keystone is a full service commercial and industrial real estate firm located in Reading PA; representing buyer, tenant, and landlord representation throughout Pennsylvania.

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