Multifamily real estate is one of the most common real estate asset class. A property with 5 or more dwellings (units) is considered commercial e.g. Apartment Community, Mid-Rise and High-Rise Apartment Buildings. They are graded based on criteria such as age, quality, amenities, rent and location among other factors in Class A, B or C.
Class A: Multifamily properties offer resort-like settings, mostly in suburban locations: lavish pools, clubhouse, barbeque areas and fitness centers. In general, Class A multifamily properties are top-tier assets that usually command the highest possible rents in their respective sub-markets.
Class B: Multifamily properties are a mid-level in terms of building quality, location and amenities. This type of real estate is often intended to offer a viable housing solution to median wage earners.
Class C: Multifamily properties are the lowest rated tier of housing. Class C properties are barely functional and are cheap to rent. Frequently, these are older assets with outdated building systems, design or finishes, or they may be in desperate need of maintenance and renovations.