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|Attributes of Class A property||Pros of Class A property||Cons of Class A property|
|• New buildings.
• Top-of-the-line technologies or construction elements.
• Prime locations.
• Highest quality.
|• Premium rental rates.
• Highest value of the three classes.
• High demand because of the convenience of ownership and quality of tenants it brings.
|• Lower cash flow or yield for an investor.
• Can be a competitive market.
|Attributes of Class B property||Pros of Class B property||Cons of Class B property|
|• Older buildings around 15 to 30 years of age.
• Some outdated technology, construction elements, or design.
•Located in slightly less desirable locations.
|• Median-range rental rates.
•Midrange value of the three classes.
•Medium to high demand because of the stable income it can provide.
|• More ongoing maintenance over time.
• Can still be expensive, especially in competitive markets.
|Attributes of Class C property||Pros of Class C property||Cons of Class C property|
|• 30 years or older.
• Considerable deferred maintenance, poor condition, or substandard construction elements.
|• Cheapest cost.
•Opportunity to add value and improve it to achieve a Class B value.
•Often has the opportunity for higher income or yield.
|• Will require more active management to improve and operate the facility.
•Undesirable locations and substandard quality of real estate in general.
•Significant upfront work to repair or improve the property.
•Can be difficult to obtain a loan because of condition or vacancy rates.
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