Rethink Your Definition of Class-A

Class-A space is changing. Once simple defined as a top-end building—whether office or multifamily—class-A now requires a lot more than just quality to be competitive. New class-A space in Downtown Los Angeles comes with a full amenity package, outdoor spaces and food-and-beverage services. Owners of existing class-A properties should take note, and will need to upgrade to keep up with the changing market.

“The class-A building type is changing in general. It isn’t luxury; it is necessity. Most of what we would have traditionally called class-A buildings in L.A. have not had any amenities,” Louise Sharp, a principal in HLW’s Los Angeles office, tells GlobeSt.com. “That is the biggest change, and I think that is a general change that is happening as work and the way that people work is changing.”

The shift in class-A quality is relatively new in Los Angeles, beginning with the development activity downtown; however, it is a trend that has been common for years in other urban markets. “L.A. is a unique market unto itself. Until recently, there hasn’t been a lot of new development,” says Sharp. “That is changing a lot now, and that is leaving a lot of high-rise buildings that haven’t had a lot of change in the last 30 years. I think this is a moment in time for L.A. to really rethink what class-A is. The high-rise is really starting to cater to a more diverse population in terms of the types of clients that will be interested in those buildings as well as the changing overall demographic and make up of the downtown area. With more people living there, there are different generations and more younger people, and there is a live-work opportunity that really can happen.”

The characteristics of the new class-A, which Sharp calls the horizontal high rise, are varied, but the major pillars are food-and-beverage services, fitness facilities conferencing and meeting space as well as outdoor space, which has become a standard in Los Angeles. “In L.A., there is a expectation that you will have access to outdoor space that you can use the majority of the year,” says Sharp. “Those spaces can be used for meeting, social activates and sporting activities. It is a large amenity for every office space.”

Sharp says that the firm is getting increasing inquiries from owners of older class-A properties, especially those that haven’t been renovated for decades, to explore redevelopment options. “We have worked with a lot of owners in Downtown Los Angeles to upgrade their facilities. There are a lot of opportunities for landlords of existing buildings to upgrade their amenity program to become a true class-A building,” she says. The firm recently renovated 915 Wilshire in Downtown Los Angeles. The project included reimagining the lobby and extended the interest experience, as well as added rooftop outdoor space.

Owners are catching onto this trend as more new properties gain attention as well as highly designed shared workspaces grow in popularity. “Co-working types of environments are going into high-rise buildings, and that is the type of environment, particularly in the design, that really does appeal to clients,” says Sharp. “You can see how well those spaces are doing. I think that once landlords see that, they understand the importance of aesthetics.”