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What are the Different Classes of Industrial Buildings?

As with other real estate property types, there are three classes of industrial buildings and with each building, there will be a class grade attached to it- Class A, Class B, Class C. It is important to consider which class will make the most sense for your investment as some of these assets are more likely to see capital appreciation whereas others will be better suited, rather, for capital preservation.

What is Industrial Property?

Industrial real estate refers to properties used to develop, manufacture, or produce goods and products, as well as logistics real estate that supports the movement and storage of products and goods.

These are the different classes of Industrial Buildings: –

Class A Industrial Properties:- 

These properties typically represent the newest and best-quality structures that exist in the market having the best amenities. These class A industrial buildings are generally located in prime locations and attract high-quality tenants with low vacancy rates.

Examples of Class A industrial real estate include a modern logistics facility near an interstate supporting an e-commerce giant or a state-of-the-art food manufacturing facility or warehousing facility near city limits.

Class A industrial assets usually are highly-priced but these Class A assets carry far less risk to investors and can be a great option for someone to preserve capital or to passively invest in some cases.

class a industrial property

Class B Industrial Properties:

Class B properties are usually a bit older, but can also be new buildings without amenities. These class B industrial assets are in secondary real estate markets and rental income is typically lower than rates the rates of Class A properties.

However sometimes Class B buildings are well-maintained, so investors can view these assets as “value-add opportunities” as they can sometimes be converted into A or B+ as city or industrial real estate demands grow.

Class B properties can be a great option for an investor who is looking for immediate cash flow and sit on their asset while the land appreciates if the property is in a desirable location.

Some industrial real estate is now being rezoned into multifamily or mixed-use sites in order to increase city density, so an investor with knowledgeable foresight could make a good guess as to whether their industrial property investment may fall into this category.

Class B buildings can be subdivided into 2 categories as follows-

B1 Industrial Properties:-

Light industrial properties are also called B1 industrial properties. These industrial properties are meant for businesses with only light manufacturing activities These industrial properties can sometimes be located very close to residential properties.

B2 Industrial Properties:-

Heavy industrial properties are also called B2 industrial properties. Businesses that operate in heavy industrial properties are usually businesses with heavier manufacturing activities and are usually located further away from residential properties.

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Class C Industrial Properties:

Class C properties are buildings that are usually 15 or more years old, have multiple deferred maintenance issues, and are sometimes located in less-desirable areas.

Class C buildings typically bring in the lowest rental rates in the market, which makes passive investment opportunities less available.

These industrial assets either go for renovation to bring them up to A or B quality or redevelopment to another property type such as residential real estate or a self-storage facility.

These types of properties are generally most suitable for high risk-taking investors, as in near future they can give very good returns.

Class C industrial real estate can also be a fantastic opportunity for an owner/user type of business, as it can help you maintain your cash flow, or in the future, it can be converted into good quality assets.


Of course, your return on investment will be influenced by a variety of factors associated with the property that you purchase, but identifying these differences in these classifications may help to narrow your focus as you move forward in the search process. Find best industrial properties as oer your requirement on .

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