Posted almost 10 years ago

Multifamily Asset Class A,B,C

One of the best lessons I have learned in real estate investing is ask questions and listen to those who have experience and knowledge. Fortunately, real estate investors are willing to share their story with like minded people wanting to learn. To learn more and share this newly learned info with other like minded investors, I created my own podcast, CREPN radio. I reach out to topic experts and ask and listen.

If you are building your knowledge base, or like to refresh, I think you will find my interview with John Wilhoit informative regarding Mutlifamily asset class grades: A, B, C and all other.

John is super knowledgable, and can go deep into a topic.

So, if you are inclined, check it out.

LISTEN: http://bit.ly/2eTzRj3CREPN64

Multifamily asset class for investors are graded by letters from A,B,C, and All Other.

John Wilhoit is an author, investor, asset manager, multifamily expert and a returning guest.

Check out John's prior appearance CREPN #27 to learn about market size.

In this episode, John breaks down the difference between the asset class grades and the characteristics of each.

The designations are primarily reference points for institutional investors investing in properties with 150 - 250 units. There are exceptions. In markets with strong demand, smaller boutique properties with fewer units can be considered class A for the marketplace, but would be regularly excluded from institutional investor consideration.

The factors that define the property class designation include age of the property, amenities offered, rents charges, level of service, safety of the neighborhood, uniformity of the property and more.

Class A properties

Located in communities of 50,000 and more.
The newest property in the area.
Features will include the greatest level of amenities in the marketplace; concierge service, dry cleaning pickup, vehicle service, etc.
Construction finishes will be of the highest materials currently in use, “Best in Class”.
Rents will be the highest in the marketplace.
Properties are located in desirable neighborhoods.
Older properties that are located in a higher desirability location that command a higher rent are referred to as “legacy” properties.

Class B Properties

Age of properties are twenty years old and older.
Older properties that are redeveloped even with the highest level of finishes will be considered “B”, or “Legacy” property
Properties are well maintained and have little to no deferred maintenance.
Rents will vary depending on the market.
Located in a safe and desirable neighborhoods.
Tenants tend to be more salaried professionals and more stable income.
Turnover will be less than that of a “C” class property.
Features will vary based on the ownership.

Class C Properties