Multifamily Property Classes in Commercial Real Estate

What Are Multifamily Property Classes in Commercial Real Estate? 

In the same way that office properties are classified by quality as either "A", "B", or "C" properties, multifamily properties such as apartments can also be classified this way. However, unlike office buildings, multifamily properties are often classified from "A" through "D." Below is an overview of each of these property types.

Class A Multifamily Properties

  • Usually 10 years old or less, may be older (but if so, will have been significantly renovated or located in a very desirable area)

  • Well-designed landscaping, well-finished rental office

  • Top-quality amenities, potentially including pools, gyms, saunas, or cafes

  • Top-quality construction, best materials

Class B Multifamily Properties

  • Usually 20 years old or less

  • Good construction quality, average to above-average construction materials

  • Slightly dated appearance, amenities no longer top-of-class

Class C Multifamily Properties

  • Usually 30 years old or less

  • Dated appearance, dated amenities

  • Medium-quality construction, little (if any) significant rehabilitation work completed

  • Appliances may not have been updated since original construction

Class D Multifamily Properties

  • Usually more than 30 years old

  • Often located in less desirable areas

  • Medium-to-poor quality construction and materials

  • Little to no amenities

  • Property may be significantly worn due to high turnover

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