Commercial real estate investment analysis begins with the physical and economic characteristics of building classes, which determine the tenant base, lease structures, operating cost profiles, and financing parameters applicable to each asset type. WMC's direct-hold programme applies a six-class taxonomy: Professional Centres, Suburban Office, Tech Industrial, and Retail Select — covered below with established economics — plus Parking Structures and Vertical Warehouses, two classes still under development whose economic characteristics (floor plate, lease term, NOI profile) will be published once their physical specifications are formally supplied. Each class occupies a distinct position in the commercial property market with distinct economic characteristics.

Key takeaways

• The four development classes with established economics differ in building configuration, typical floor plate, tenant profile, and lease structure — these differences produce materially different NOI profiles, capital intensity, and risk characteristics for each class.
• Single-tenancy and small-bay configurations (Tech Industrial, Retail Select) produce higher management intensity but lower co-tenancy dependency risk than multi-floor office buildings.
• Professional Centres and Suburban Office assets are valued primarily on the income capitalisation method (NOI ÷ cap rate); Tech Industrial and Retail Select assets in co-located nodes are additionally influenced by anchor-driven traffic and consumer expenditure data.

Professional Centres

Professional Centres are multi-floor commercial buildings targeting professional service tenants: medical and dental practices, legal and accounting firms, financial advisory businesses, and related occupiers whose client-facing operations require accessible, professional-quality premises.

The standard floor plate for Professional Centres is approximately 21,000 square feet of rentable area per floor. Multi-floor configurations allow subdivision to accommodate both full-floor and partial-floor tenants, increasing the potential tenant pool and reducing single-tenant lease rollover risk.

Professional Centre tenants typically operate on longer lease terms (five to ten years) than retail tenants, reflecting the capital investment required to fit out a medical or professional services suite and the substantial cost of relocation. This lease term structure provides income stability at the expense of flexibility to reset rents at market rates between tenancy cycles.

The operating expense profile of Professional Centres includes above-average building systems costs (HVAC loads for medical suites, elevator maintenance in multi-floor buildings) relative to single-storey configurations, which reduces net rentable area efficiency but is offset by the premium rents achievable in accessible, well-managed buildings.

Suburban Office

Suburban Office buildings serve professional and business-process tenants who require more space than a downtown professional centre but operate in suburban or secondary markets where land cost and parking availability differ from core urban nodes.

The standard floor plate for Suburban Office is approximately 19,000 square feet of rentable area per floor, reflecting the slightly smaller tenant profile and different structural standards compared to Professional Centres. Surface parking at grade — rather than structured parking — is typical in suburban configurations, lowering the cost basis relative to urban sites.

Suburban Office buildings adjacent to large-format retail nodes benefit from the infrastructure and traffic that the retail anchors generate — accessible road networks, daytime population density, and proximity to food service — without absorbing the retail premium in land cost. This positioning is a distinct economic feature of co-located suburban office assets relative to isolated suburban office parks.

Lease terms are typically five to seven years, and the tenant mix often includes regional offices of national firms, healthcare-adjacent services, and government or quasi-government tenants whose space requirements are stable over medium time horizons.

Tech Industrial

Tech Industrial assets are single-storey, purpose-built commercial buildings designed for light industrial, logistics, assembly, and technology-operations tenants. The configuration is typically paired units of 7,200 to 8,400 square feet per bay, allowing occupation by one or two tenants per building and straightforward subdivision.

The economics of Tech Industrial assets differ materially from office configurations. Lower building system complexity reduces operating costs. Higher ceiling heights and grade-level loading access expand the tenant pool to occupiers whose activities require floor loading or vehicle access not available in office buildings. The single-storey footprint eliminates elevator cost and mechanical systems associated with vertical circulation.

Tech Industrial assets in co-located commercial nodes serve the last-mile logistics, light manufacturing, and service business occupiers whose operations are complementary to the retail and professional services anchoring the node. The tenant base for Tech Industrial is typically drawn from a broader range of business types than office buildings, reducing exposure to any single industry's cyclical behaviour.

Lease terms in Tech Industrial range from three to seven years, shorter than professional office but longer than neighbourhood retail, reflecting the moderate relocation costs of industrial tenants.

Retail Select

Retail Select assets are single-storey commercial buildings designed for retail and service tenants in the 4,500 to 7,700 square foot range — smaller than large-format anchor stores but larger than typical strip retail units. The configuration accommodates junior anchors and specialty retailers whose format requirements exceed the capacity of standard strip retail. Food service providers are explicitly excluded from Retail Select — the format is not sized or serviced for the parking, waste management, and ventilation demands that food service tenancies impose (see Retail Select for the exclusion rationale).

Retail Select assets are explicitly co-location-dependent: their site selection relies on the presence of institutional-grade retail anchors within defined catchment radii, which generate the sustained consumer traffic that makes Retail Select tenancies viable. An isolated Retail Select building, absent the anchor network that drives foot traffic to the node, does not share the same site characteristics.

The tenant profile for Retail Select includes national specialty retailers, health and beauty services, and financial services outlets that require dedicated retail premises rather than an office-style tenancy. Lease terms are typically five years with renewal options, and occupancy costs are typically structured as a combination of base rent plus a share of common area maintenance recoveries.

Retail Select assets have higher tenant turnover rates than office or industrial assets, reflecting the competitive nature of the retail sector and the sensitivity of individual retail tenants to changes in consumer spending patterns. This turnover rate requires active asset management to maintain occupancy and to identify replacement tenants when vacancies arise.

Cross-class comparison

Class	Typical floor plate	Storey type	Lease term	Tenant profile
Professional Centres	~21,000 sq ft / floor	Multi-floor	5–10 years	Medical, legal, financial services
Suburban Office	~19,000 sq ft / floor	Multi-floor	5–7 years	Regional offices, healthcare-adjacent
Tech Industrial	7,200–8,400 sq ft / bay	Single-storey	3–7 years	Light industrial, logistics, services
Retail Select	4,500–7,700 sq ft	Single-storey	5 years	Specialty retail, banking, health and beauty (no food service)

Parking Structures and Vertical Warehouses

Parking Structures and Vertical Warehouses complete the six-class taxonomy but are still under development: neither has a fixed floor plate, structural system, or building services configuration published yet, so neither carries an economic profile in this article. Their NOI drivers, lease structure, and capital intensity will be added once their physical specifications are formally supplied.

See also

• Development Classes — the six-class framework, including the two classes without established economics yet
• net-operating-income — the metric applied to each class to assess operating performance
• commercial-real-estate-cycles — how each class responds differently to market cycle phases