Expert Insight: Uh oh, Class B office space is disappearing

There is a trend in the Washington, D.C., commercial real estate market where owners of older and well-located office buildings, traditionally Class B, are upgrading and repurposing these once-staid buildings to meet the demand and reap the higher rents attainable for Class A properties.

Not every tenant, however, has the budget available to seek out trophy office space. Many nonprofit and trade association tenants, who are mission focused, seek to keep their overhead low, forgoing some building amenities. D.C. has traditionally offered an abundant supply of older Class B space to serve their needs but now these options are dwindling. 

In recent years, developers have taken advantage of market dynamics and demand to reposition or redevelop many of these older structures — undertaking extensive renovations that command premium rents as Class A+ or trophy buildings. Since 2013, more than five buildings a year have been repositioned from Class B to Class A in D.C. 

As the inventory…

Read the full story from the Washington Business Journal.