In the office real estate market, the concept of "property classes" is commonly discussed. For instance, in major cities in Mexico such as Mexico City, Guadalajara, Monterrey, and Querétaro, there are approximately 10.7 million square meters of Class A+, A, and B office spaces, according to data from SiiLA. But what exactly are property classes, and what purpose do they serve in the commercial real estate market? Let us explain.

Property classes are categories used to classify and evaluate the quality and characteristics of a property, providing a general reference to describe the condition and level of finishes in a space or a building. The most common and highest-ranking property classes are A+, A, and B, while there are also lower-quality or more deteriorated classes such as C and D. These classifications are important as they provide valuable information about the current state of properties and contribute to making informed investment decisions. SiiLA offers intelligent solutions for the commercial real estate market, such as Market Analytics, which allow people to access relevant information about properties, including their features.

So, how are office properties classified, and what characteristics are considered for their classification?

At SiiLA, our team of researchers visits various markets and submarkets across the country every quarter. During these visits, a set of basic characteristics are reviewed and noted down, which properties must possess to be classified in one class or another. It's worth mentioning that property classification in Mexico may vary based on the classification methodology, although most rigorous classifications consider similar characteristics. Here are some of them:

1.- Floor Layout: This indicator measures the average floor area, in terms of rentable square meters, of an office building's typical floor. A Class A+ building has a floor layout of over 700 square meters, a Class A building ranges from less than 700 to 450 square meters, and a Class B property has a floor layout below 450 square meters.

2.- Parking Ratio and Elevators: The parking ratio measures the relationship between the rentable area in square meters and the number of parking spaces corresponding to that area. Class A+ properties have one parking space per 30 rentable square meters of offices, Class A properties have one space for every area ranging from 31 to 35 square meters, and Class B properties have one space per area of 36 square meters or more. As for elevators, Class A+, A, and B corporate buildings have mfore than six, five to four, and fewer than three elevators, respectively.

3.- Air Conditioning, Fire Protection, and Power Backup: These features are essential for enhancing the quality and ensuring optimal conditions in the office environment. To be classified as Class A+, A, or B, office buildings must have these services or qualities.

4.- Security Access, Closed-Circuit Cameras, and Sustainability Certification: Now more than ever, security and Environmental, Social, and Governance (ESG) practices are crucial for the success of a corporate or office space. Class A+ and A properties possess these qualities, while Class B properties may have some or none of these features.

Property classes can also take into account factors such as the age of the building and space utilization efficiency (usable space vs. rentable space), among other examples. To learn more about the characteristics of commercial properties in Mexico, visit the SiiLA reference materials for clients or contact us at contacto@siila.com.mx.