The Only Difference is the Letters. Specifics of Managing Buildings in Classes A and B

Natalia Skachkova, commercial director of O1 Standard, explains the differences between management of class-A and class-B office buildings and what it has to do with the professionalism of the management company.

The first thing to say is that boundaries between buildings in classes A and B are increasingly blurred. Some new class-B buildings are approach class A, thanks to rapid advances in construction and engineering technologies. On the other hand, some class-A facilities, built over a decade ago, really belong in class B as regards quality of their engineering systems, and their architectural and planning solutions. But formally they are still in class A.

Roughly speaking, we can say that class A consists mainly of new buildings with sophisticated and modern engineering systems that require qualified specialists to manage them. Architecture and planning is usually superior in class A, and class-A buildings tend to have the best location and more amenities. For example, one of our facilities includes a kindergarten, and that required a rethink of how to use building and grounds, construction of a playground that didn’t’ take away from the architectural ensemble and business style of the building, as well as separation of user flows in and around the building.

Class A offers higher standards of hospitality and front-office communication with clients. Ideally, these should match the standards of five-star hotels: staff should be well-trained and ready to address any issue that a client brings.

Companies renting class-A buildings often work around the clock, and that entails various challenges for the management company. The company must have a service plan that ensures well-coordinated 24×7 operation of all its services (control room, security, duty team of engineers and technicians, etc.).

Another difference is that class-A buildings, particularly new ones, are more likely to be certified to environmental performance standards, so the management company needs special know-how to ensure compliance with the standards. That means responsible procurement policy, RSO, supply chain assessment (carbon footprint), a special schedule and procedure for equipment maintenance, etc.

However, none of these differences mean that a class-B building can be managed to lower standards than a class-A building. Class-B (especially B+) buildings are not much inferior to those in class A and someone who walks into two buildings that have similar décor,but are not in the same class, may not notice the difference, at least not immediately. Service quality and professionalism of management company staff is as important to tenants in class-B office buildings as to those in buildings of class A. Take, for example, this recent example: a potential client, a prominent developer working with class-B buildings, sent a representatives to see to see what service standards our Company provides in class-A offices (business etiquette, requirements for appearance and clothing, rules for business correspondence by staff of the management company, etc.). 

O1 Standard applies the same requirements for the management of class-A and class-B business centres. All of our staff, from security guard to chief engineer, must be familiar with the requirements before they starting working for us. O1 Standard provides its services in 11 class-A business centres and three centres in classes B and B+.


Class A

– Complex engineering, special qualifications of personnel.

– High standards of front-office (reception). Service should be similar to a high-quality hotel – unobtrusive, but clear, fast and with a smile.

– Amenities are often specific and require careful management.

– Use of latest technologies in manager-tenant interaction (digitalization, communication in remote and mobile format, services for tenant staff).

– Positive attitude to technology, readiness to perform non-standard tasks (installation of electric vehicle chargers, etc.).

– Class-A buildings often have a certificate of environmental performance, so the management company must know how to ensure that the building complies with green standards (separate waste collection, environment policy, responsible procurement, minimizing carbon footprint in the supply chain, etc.).

– Class-A buildings usually set higher requirements for maintenance of shared-use zones, separation of pedestrian and vehicle traffic, creation and maintenance of recreation zones, and landscaping.

Class B

A class-B building can be managed just as well as a building in class A. Management quality is one of the top-3 factors that companies consider when choosing where to locate their office, so building owners cannot afford to neglect it. How to do everything in a class-B building just as well as in a class-A building is a key challenge for management companies. 

The management company should create comfortable conditions for conducting business and facilitate the employees’ return to the office

O1 Standard’s COO Dmitry Sveshnikov discussed new trends in the commercial real estate management sphere, green technologies, new approaches to business and the company’s plans with the information portal.

Dmitry, please tell us how the pandemic affected the management company market?

In a sense, the pandemic benefited management companies, accelerating industry digitalization and bringing management companies closer to their tenants, who are the end users of their services. A management company now performs significantly more functions than it used to: prior to the pandemic, it was solely responsible for the functioning of the business center as a whole, and the manager’s task was to make the facility operate normally. That was when the word “remote” was not yet a part of our everyday vocabulary, and working in an office was an absolutely natural phenomenon. Then the pandemic started, remote work became the norm, and by approximately the fall of 2020, many companies were forced to realize that their intention to bring at least some of their employees back into the office ran into a lack of understanding on their part. That’s when it became necessary to create a working environment that would not only be more comfortable than home, but also more inspiring. The building infrastructure, the range of services that can be obtained onsite, a variety of recreation areas, leisure opportunities, and simply the building’s convenience and aesthetic appeal are now the responsibility of the management company. Today, the office and the business center space are turning into tools for non-material employee motivation, which is what we mean by the growing role of the management company in the building. The management company should help tenants create comfortable conditions for conducting their business and bringing employees back into the office.

How would you motivate employees to return to the workplace?

Among the arguments in favor of the office is that it has become more than merely a workplace. A business center now offers more than a productive working atmosphere; it also provides additional infrastructure that allows office workers to solve their everyday problems without leaving the building: an ATM, a dry cleaner, a purchase pick-up point… We have already noted that some time ago the concept of a “comfortable office” came to imply a “green” office, but today, a “green” office is not just about the environment – it’s also about a user’s comfort. After all, a person spends 8-9 hours a day at the workplace. How does he feel there? The BREEAM certification system has solved this problem already, while FitWel and Well are even founded on the desire to ensure that a person is as comfortable as possible in the workplace.

I know that your company recently hired a certified “green” standards appraiser. Does the new reality dictate new terms, or do you just want to keep up with the trend?

Green certification and green standards have long been implemented in the West. In Russia, the pandemic forced companies to take a closer look at environmental standards to make the tenants feel comfortable and safe in the office. The O1 Standard portfolio manages the largest number of Breeam-certified business centers, and we monitor the trends in this sphere very carefully.

We have always sought to improve the environmental performance of the buildings under our management, and complying with the “green” standards is only a part of this process. The sustainability agenda of the business sector as a whole is expanding, so naturally, companies, especially public ones, pay close attention to the office and the building in which they operate and the extent of their compliance with international environmental performance standards. The building’s environmental certificate is gradually becoming if not a mandatory requirement, then certainly a factor that increases the attractiveness of a facility for class A and premium tenants. The next step in this direction is to evaluate an office for environmental performance. Many tenants are changing the workspace concept to meet the new sanitary and epidemiological requirements and to make it suitable for partially remote work. When implementing these projects, there is a demand for the introduction of green office technologies. We want to help our tenants solve the maximum range of tasks, and would ultimately like them to resolve all of their problems by working with us under a “one-stop” concept. Hiring a staff certified appraiser helps us both improve our own management standards and work with our tenants to implement projects of this sort.

I received a release from you about the successful completion of the Space 1 Balchug’s Fitwel certification. It became the first project in Russia to receive this certificate. Why did tenants require this specific credential?

Yes, indeed, we were the first in Russia to complete the Fitwel building certification process together with our partner, Cushman & Wakefield. Unlike BREEAM or LEED, it focuses entirely on assessing working conditions and their impact on the health and productivity of our employees. Most of the parameters assessed are directly related to eco-efficient technologies, but this standard assesses their impact on human beings. Thus, a Fitwel certificate can be considered an independent confirmation that people in this building will work in comfort and have a variety of food service, sports, leisure and recreation options, as well as that all temperature and acoustic standards will be met. All this helps to reduce stress and increase the level of employee satisfaction with working in the office.

Could you please tell us about how the company is doing in general?

We feel confident. In 2020, we started working with service offices – this requires an individual approach to drawing up a service plan. In January 2021, we took over the management of Tower A of the SkyLight business center, and prior to that, we successfully carried out technical due diligence in the process of selling the facility to a strategic investor. We also signed a contract for the maintenance of the multifunctional complex “Legend of Tsvetnoy.” We are actively expanding the business of servicing individual tenant offices: we won 43 tenders and received 2.5 times more client applications for additional services. The growth rate is preserved this year: the first quarter brought 7-8% more additional work than we had planned. However, the growth of our portfolio was mostly warranted by specific offices, rather than by whole buildings. We also plan to try our hand at managing premium residential projects with our partner – we have sufficient competencies for that.

You are called the “internal” management company of O1 Properties, how do you feel about that?

We often hear that everything came easy to us, since a major proprietor of class A office real estate transferred their entire portfolio under our management. But for some reason, everyone forgets what a colossal responsibility it is. We do remain a strategic partner of O1 Properties, but our portfolio is not limited to the properties of a single owner. A company’s success should be judged by the results of its work and the level of satisfaction of the owner and tenant companies in the building. In our case, 2020 results demonstrate that the tenant satisfaction level has increased in all our buildings, which is the biggest victory for us. Today we are developing as an independent company and, given the wide range of our team’s competencies, we can compete with many market participants. We believe in the success of our strategy, which is to work for the benefit of the building’s tenants, or even their employees, rather than for the building’s owner: if they are satisfied, then tenant loyalty grows. And, as you know, that increases the building’s investment value – the main KPI used by proprietors when choosing a management company.

Interviewed by Anastasia Kremenchuk


Why do business centers need “smart” technologies?

Most BMS-systems (building management systems) in commercial real estate were designed at a time when a completely different level of technology was in place, and when automation tasks were reduced mainly to managing security systems. Currently, the requirements for automation systems have changed since, on the one hand, technology has significantly progressed, and on the other hand, the very concept of the process of managing commercial real estate is being reformatted, with the impact of the pandemic factored in, says Andrey Kuzminov, IT director of O1 Standard.

Costs or savings?

When discussing digitalization, several different aspects need to be considered in relation to building management, namely:

Management of a building’s life support systems

This requires a more advanced approach than standard security management. The management company is expected to monitor resource consumption and develop measures to reduce their consumption. At the same time, cutting back on resources should not adversely affect a person’s comfortable experience in a building. On the contrary, there is an interest in systems that monitor air quality and its oxygen saturation, the introduction of zonal lighting and temperature control systems, and so on. In most cases, these improvements require funds to upgrade the existing systems.

Management of inquiry systems in management company – tenant interaction. 

Despite the rapid advance of digital technologies in all spheres of our lives, the telephone and the Excel spreadsheet still play a decisive role in the interaction between tenants and the management company. Meanwhile, the pandemic has revealed the importance of having convenient means of remote communication, and standard communication methods are not always the best solution. We have already opted for transferring our entire inquiry system to a mobile app, which both prevents communication errors and increases inquiry processing speed, allowing to analyze the quality of operational processes within the company.

Analysis of user experience in improving the quality of people’s stay in a particular location

Increasing competition and growing complication of the game rules in the retail real estate market have already forced our colleagues to face the need to improve visitor’s experience in shopping centers. For office properties, this is still an undeveloped territory, which requires the management company to reach its end user, while managing companies traditionally limit the circle of their “interested parties” to the building owner and the tenant’s administrative management.

The implementation of all these systems requires an integrated approach and, typically, significant investments. Given the instability of the office real estate market in the last several years, the need for investments is becoming the main obstacle to the development of digital technologies in management.

“Green” digitalization.

Today, tenants are beginning to seek the introduction of green technologies in building management systems. At the same time, the interest in these technologies is not limited to the savings that they lead to. It also comprises enhanced space quality and improved user health. For example, a modern BMS should not only monitor resource consumption and control the viability of engineering and security systems; it must also monitor air quality and its oxygen saturation indicators – the key factors in creating a comfortable and productive environment.

Judging by how this trend is developing in Europe, modernization of BMS systems is in full swing. Sensors monitor changes in air quality, water and temperature in an online mode, and these parameters can be quickly adjusted. For example, if there is smoke from the suburbs or something nearby catches fire, sharply increasing the amount of carbon dioxide. There already are completely autonomous full-cycle systems that read internal parameters (say, air quality deterioration due to building repairs), monitor the weather forecast, check the level of exposure to ultraviolet radiation and the level of environmental pollution. A complex algorithm created on the basis of this data allows for an adjustment of these indicators inside the building. The influence of the external environment is minimized in the business center, thus creating a kind of an “ideal cocoon.” At the same time, it has been scientifically proven that the quality of the building environment and the user’s personal comfort level are important factors in shaping their productivity and work performance efficiency.

What about the pandemic?

Contactless technologies that have burst into our lives in connection with the pandemic are a separate issue. In business centers, these are, first of all, various auxiliary systems that allow you to move around the building without touching any buttons (hands free): walkways, turnstiles, elevators. All of these can be opened/called using a mobile phone, which “knows” which floor to take you to.

Before the pandemic, technologies of this sort were available only in new class A buildings, but today many owners and management companies are primarily concerned with contactless entry and safe movement around the building. Some introduce digital smartphone passes, others use Face ID (face recognition) technology. The development of this market has led to a reduction in the costs of such projects. They can also be installed quickly: it takes one month to mount the system in one building. At this time, at least 15-20% of the facilities on the market already use these digital technologies in one form or another; and this trend will continue to develop more or less actively both in Moscow and in the regions.

Man is once again the “measure of all things”

“Smart technologies” in office buildings are no longer a tribute to fashion, but a global trend. When numerous people are engaged in at least partially remote work, office quality requirements are higher than ever. If employees spend only part of their working time at an office, it should be convenient, comfortable, safe, equipped for teamwork and, most importantly, broadcast the tenant’s company values. Given the growing importance of IT in modern business, companies that develop new products and services and expect peak performance from their employees, who should go beyond standard solutions and create breakthrough products, cannot position them in an outdated building. Therefore, giants like Sberbank or Yandex are building their own headquarters – they understand the value of investing in a high-quality “smart” office. However, not every company can afford to build an office to its own standards, so owners and management companies should consider the more large-scale introduction of digital technologies in their buildings in order to increase their competitiveness in our rapidly changing world.