Commercial Financing by Lightning Commercial Funding, Inc.
Home   |   Newsletter   |   Blog   |  Contact Us
Your place for Small Business Loans and Commercial Financing
Commercial Funding
Estate Financing for Commercial Projects

Office Buildings, A General Overview


Many Real Estate Developers as well as the loan underwriters categorize commercial office buildings by their appearance and location.
In addition they can be further categorized by their construction type. For example you can construct commercial buildings as low-rise, mid-rise and high-rise buildings.


Building and Owners Association or BOMA classifies building types into three classes, A, B and C.

Class A Properties

"Defined by BOMA as the most prestigious buildings competing for premier office users with above average rental rates for the area along with high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence."

Class B Properties

"Defined by BOMA as buildings competing for a wide range of users with rents in the average range for the area and the systems are adequate, but the building does not compete with Class A at the same price."

Class C Properties

"Defined by BOMA as buildings competing for tenants requiring functional space at rents below the average for the area."

After the commercial office buildings are divided into classes they are further divide by location, either a downtown location or a suburban location.

Developers will build a different product based on location of the acreage they are planning to develop.

Density is the reason for the distinction...

Developers all have a great need to build the most square footage in the least available space. The public agencies place density restriction upon developers when they are seeking their maps, and later building permits.

When a developer is limited to the available acreage and resulting construction footprint, the square footage of the building foundation, they can therefore only build a certain amount of building space in the limited footprint.

There answer is to go up. By building mid-rise and high-rise commercial office buildings downtown they can provide more units per square footage, thus building at a higher density.

The downtown districts for commercial loan purposes is called Central Business Districts or CBD's.

So with commercial property selling at a premium per square foot in downtown locations, the answer is to build taller buildings, providing the developer with a greater return on their investment.

Builders may construct these CBD for either single tenant or multiple tenants. They often come with underground parking as well. The Suburban Office Building is built away from the City Districts.

When a builder builds away from the downtown area density is not as much of an issue, because the cost per acre of the lot is not at a premium you will tend to see many low-rise and few mid-rise and high-rise buildings.

Suburban Office Buildings are usually constructed by a single developer of large office parks

For further discussion of office buildings and their respective underwriting loan requirements click here.


Lightning Commercial Funding - Small Business Loans, SBA Loans San Diego