Why Class B Office Space Is Having a Moment And How Smart Upgrades Can Improve Leasing, Retention, and Returns

Written by Zack Griffin, President & Founder of Evolved Lighting & Energy

Zack started Evolved in 2006 with the mission to transform lighting in commercial spaces from traditional and costly, to energy efficient and productivity boosting. He uses science, significant product knowledge and design expertise to grow Evolved into the successful business it is today.

 

For years, Class A office space dominated the conversation. New builds, premium amenities, and trophy locations were the clear winners as companies competed for top talent and modern workplaces. But as we move into 2026, the office market is telling a more nuanced story, especially in growing metros like Columbus.

Recent leasing data shows that Class B office space is gaining serious momentum. In fact, according to market data reported by JLL and highlighted in a recent Columbus Business First article, Class B properties outpaced Class A in net absorption in the fourth quarter of 2025.

Class B saw 145,885 square feet of positive absorption, compared to 100,531 square feet for Class A during the same period.

This shift is not a rejection of Class A. Rather, it reflects tightening supply, changing tenant priorities, and a growing opportunity for property owners who are willing to invest thoughtfully in their assets.

A Quick Primer: What Do Class A, B, and C Offices Really Mean?

Office classifications are not official designations, but they are widely used across the industry to set expectations.

• Class A buildings are typically new or recently renovated, located in prime areas, and offer top-tier finishes, amenities, and building systems. These are the spaces that command the highest rents and attract tenants looking to make a statement.
• Class B buildings are often a generation older but still well-located and functional. They may not have the same level of finish or amenities as Class A, but they offer solid fundamentals and more accessible lease rates. With the right upgrades, many Class B buildings can narrow the gap significantly.
• Class C buildings are usually older, with minimal updates and fewer amenities. These properties often require significant reinvestment to remain competitive and are more likely to appeal to cost-driven tenants.

What we are seeing now is Class B stepping into the spotlight as Class A availability tightens.

Why Tenants Are Turning to Class B Space

In Columbus, areas like Dublin, Grandview, and the Central Business District have become hotspots for Class B leasing activity. In Q4 alone, Dublin and Grandview accounted for more than 100,000 square feet of positive absorption, signaling strong demand.

JLL brokers note that as trophy Class A spaces fill up, tenants still want quality environments that help attract employees back to the office, and retain them. When Class A options are limited, Class B becomes the next best alternative, especially when it offers upgraded systems, modern lighting, and meaningful amenities.

Importantly, this trend tends to reinforce itself. As JLL Managing Director Andy Dutcher noted, Class B success often follows Class A. As occupancy improves, owners reinvest, and the buildings become even more attractive to future tenants.

Why Office Space Is Filling Up Right Now

The renewed interest in office space is not driven by a single factor. It’s the result of several overlapping trends that are reshaping how and why companies use physical workplaces.

Return-to-office policies are part of the story, but not the whole picture. Many organizations are settling into more structured hybrid models, which still require consistent, high-quality office space. Even when employees are not in the office five days a week, companies want environments that make in-person time productive, comfortable, and worth the commute. That has pushed demand toward spaces that feel modern, efficient, and well-maintained.

Business growth is another driver, particularly in markets like Columbus that continue to attract corporate investment. Expanding teams need space, and not every growing company can secure Class A offices when availability is limited. Class B properties that offer upgraded systems and competitive amenities provide a practical alternative without sacrificing employee experience.

There is also a noticeable flight to quality within each class. Tenants are consolidating from older, underperforming buildings into fewer, better spaces. That means Class B buildings with strong fundamentals and recent improvements are gaining ground, while those that have deferred investment are being left behind.

Finally, operating costs matter more than ever. Tenants are increasingly sensitive to energy efficiency, comfort, and reliability. Buildings with efficient lighting, modern controls, and fewer maintenance issues are easier to budget for and operate. That predictability is attractive in an uncertain economic environment.

Together, these factors help explain why office absorption is improving and why well-positioned Class B assets are seeing increased interest. The spaces filling up are not just available, they are adaptable, efficient, and aligned with how work actually happens today.

The Role of Building Upgrades in Class B Competitiveness

This is where lighting, controls, and amenities play an outsized role.

Lighting is one of the most visible and impactful upgrades a property owner can make. Modern LED lighting improves brightness and uniformity, reduces maintenance issues, and can cut lighting energy use by 40 to 60 percent compared to legacy systems. When paired with smart controls, additional savings of up to 30 percent are often achievable through scheduling and occupancy sensing.

For tenants, these improvements translate into more comfortable, professional spaces that feel intentional rather than dated. For owners and managers, they mean lower operating costs and fewer service calls, both of which improve net operating income.

Amenities matter as well. EV chargers, once considered a luxury, are increasingly viewed as a practical necessity. As electric vehicle adoption continues to rise, on-site charging supports tenant recruitment and retention, particularly for companies trying to differentiate their workplace experience without moving to a higher rent bracket.

Don’t Overlook a Powerful Tax Incentive: Section 179D

One of the most attractive financial levers building owners can use when planning upgrades is the 179D Energy Efficient Commercial Buildings Tax Deduction.

This federal incentive allows commercial property owners to claim a tax deduction for installing energy-efficient systems — including interior lighting, HVAC, and other building improvements — that measurably reduce energy costs.

In recent years the deduction has expanded to offer significant value tied directly to energy performance: for 2025 and 2026 projects, the base deduction starts around $0.59 per square foot for a 25 percent energy savings and increases above $5.00 per square foot if it’s comprehensive and utilizes prevailing wages.

Importantly, a hard deadline has now been established: to qualify for this incentive, construction must begin before June 30, 2026. Projects that start after this date will not be eligible for the 179D deduction at all, meaning property owners and managers need to plan upgrades now if they want to include this value in their financial modeling.

This makes early scoping, modeling, and teaming with experienced designers and contractors more important than ever. Starting sooner not only increases your odds of capturing the deduction but also aligns your improvements with broader energy performance goals and tenant experience enhancements.

How Upgrades Impact Leasing and Returns

Upgrades do not just improve the look of a building. They influence leasing velocity and long-term returns.

Buildings with modern lighting, efficient systems, and relevant amenities tend to lease faster and retain tenants longer. They also position owners to justify rent increases more confidently, even within the Class B market. In many cases, these improvements can be partially offset through utility incentives, rebates, and financing options that reduce upfront costs.

Perhaps most importantly, proactive investment allows owners to control timing and scope. Rather than reacting to complaints or system failures, upgrades can be planned around leasing cycles and capital budgets, reducing disruption and improving outcomes.

Looking Ahead

The Columbus office market reflects a broader trend happening in many regions. As Class A supply tightens, Class B buildings with the right upgrades are well-positioned to capture demand. For property owners and managers, this moment presents an opportunity.

Strategic investments in lighting, controls, and amenities can help reposition assets, improve tenant experience, and protect long-term value. In a market where quality still matters but flexibility is key, smart upgrades can make all the difference.