Class A, B, C (Building Classifications)

Class A/B/C is an informal LA multifamily building classification based on age, amenities, condition, and tenant profile. Class A is newer and higher-end; Class C is older, value-add-oriented, with working-class tenant base.

What it means in practice

Not a formal designation — but widely used in LA multifamily underwriting:

• Class A: Newer (typically post-2000), high-end amenities, premium demographics. Commands top cap rates (4-5%). Often institutional-grade.
• Class B: Mid-age (often 1980s-1990s), solid condition, middle-market tenants. Cap rates 4.5-6%.
• Class C: Older (pre-1978 typical), basic amenities, working-class demographics. Cap rates 5-7%. Often value-add opportunities.

Why it matters for LA multifamily

Most LA multifamily under RSO is technically Class B or C — the regulatory constraint is the defining investment characteristic, not the age/quality alone. A 1965 Koreatown building might be Class C on age but have stabilized Class B economics. Classification matters less than regime + rent roll.

Related terms

• Value-Add Multifamily
• Core Multifamily
• Post-1995 (Costa-Hawkins Exempt)

Related glossary terms

• Absorption
• Concessions
• Core Multifamily
• Post-1995 (Costa-Hawkins Exempt)
• Stabilized Asset
• Submarket