Office Buildings for Sale: What to Check Before You Buy an Office or Owner-User Building

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Before you buy an office building in California, confirm that its permitted occupancy matches how you or your tenants will use it, check its energy-code and benchmarking status with the California Energy Commission, and find out whether it has had a CASp accessibility inspection. Then read every lease, or, if you plan to occupy it yourself, confirm that you will meet SBA’s owner-occupancy test if you want an SBA loan.

This guide is for owner-users and investors looking at small and mid-size office buildings, professional suites and medical office in the counties we serve. It explains rules and process, not prices, vacancy or cap rates.

Owner-user or investor: decide first

The same building is a different purchase depending on who will occupy it.

• Owner-users (a law firm, accounting practice, contractor’s office or medical group) care most about layout, permits for their use, parking and financing. Our owner-user commercial property guide covers how to compare buying with leasing.
• Investors care most about lease terms, tenant credit, rollover and operating costs. Value starts with net operating income and the methods in our commercial property valuation guide.
• Partial owner-users occupy part of the building and lease the rest. That mix is common with small professional buildings and is where SBA’s occupancy percentages matter most (see the financing table below).

Building code: occupancy and change of use

The California Building Code (Title 24, Part 2) classifies every building or suite by occupancy group, and the permits on file tell you which group the building was approved for. The 2025 edition of Title 24 took effect January 1, 2026, according to the California Building Standards Commission. Offices are classified as Group B (business); the City of Roseville’s certificate of occupancy packet uses a Group B office suite as its example.

Why this matters to a buyer:

• A new tenant or new use can trigger a permit. In Roseville, for example, the city’s packet requires a certificate of occupancy for a change in use, occupancy or tenant in an occupied commercial building, and for a permit that creates a newly occupied suite. Other cities and counties have their own versions; ask the building department in the jurisdiction where the parcel sits.
• Converting space changes the code path. Turning offices into a clinic, classroom, gym, lab or apartments can change the occupancy group, which can bring fire, exiting, accessibility and structural upgrades. Get an architect’s code analysis before you price a conversion.
• Permit history. Compare the as-built floor plan with permits on file. Unpermitted suite build-outs are common in older office buildings.

Zoning is a separate check from the building code: confirm with the city or county planning department that office use (and any medical or service use you plan) is allowed in the zone. Our commercial due diligence checklist lists the zoning, permit and code-violation records to request.

Title 24 energy rules and CEC benchmarking

Two separate California Energy Commission programs reach office buildings.

The Energy Code (Title 24, Part 6). The CEC’s 2025 Energy Code page says the 2025 standards apply to buildings whose permit applications are submitted on or after January 1, 2026. If your plans include tenant improvements, new lighting, HVAC replacement or envelope work, your designer will need to show compliance for the permitted scope. Ask early how energy-code work affects your improvement budget.

Building Energy Benchmarking. Under the CEC’s Building Energy Benchmarking Program, owners of disclosable buildings with more than 50,000 square feet of gross floor area must report energy use every year by June 1 through ENERGY STAR Portfolio Manager. For commercial buildings, reporting began June 1, 2018. The CEC publishes building data on a public disclosure dashboard. Some cities with their own qualifying benchmarking ordinances are exempted from the state program, so check whether a local ordinance applies instead.

For a building over the threshold, ask the seller for its prior benchmarking submissions and utility data; they also give you real operating history to test the seller’s expense figures.

CASp and accessibility

Civil Code section 1938 requires commercial owners to state on each lease signed on or after January 1, 2017, whether the premises were inspected by a Certified Access Specialist. If a CASp report exists, the tenant must get it at least 48 hours before signing or may rescind within 72 hours after signing, and repairs it identifies are presumed to be the owner’s responsibility unless the parties agree otherwise. As a buyer, ask for any report, check that existing leases contain the required statement, and budget for path-of-travel work if you plan improvements. Our CASp and ADA guide goes deeper.

Leases in an office building

Office leases vary more than retail leases. Expect full-service gross leases in multi-tenant buildings, modified gross leases in smaller ones and NNN leases mainly for single-tenant buildings. When you review them:

• Expense terms. Base year or expense stop, what counts as an operating expense, and caps on controllable costs. See commercial lease types.
• Tenant improvement obligations. Unfunded TI allowances or free-rent periods the seller agreed to but has not paid.
• Options and rights. Renewal, expansion, early termination and rights of first refusal or offer.
• Estoppels. Confirm each lease with a signed tenant estoppel certificate before you remove contingencies.
• Deposits. Under Civil Code section 1950.7, the seller must transfer commercial deposits to you, less lawful deductions, and notify each tenant, or refund them; if you receive them, you take on the obligations.

If you plan to occupy space now held by a tenant, read the lease term and any termination rights before you count on moving in. A tenant with years left and renewal options can keep you out.

Medical office

Medical office looks like ordinary office space from the street, but it brings heavier plumbing, electrical and HVAC needs, accessibility scrutiny, and sometimes different zoning treatment. Our medical office space guide covers those points. If you are buying a building with medical tenants, ask for each tenant’s improvement history and any special equipment that stays with the building.

Financing an office building

Our SBA 504 vs. 7(a) comparison explains the two programs. Investors generally use conventional commercial loans; in practice those lenders focus on the rent roll, lease rollover and the building’s operating history, so expect them to ask for estoppels, leases and expense statements. A purchase is also a change in ownership that the BOE’s change in ownership guidance says leads the assessor to reassess to current market value; build that into your expense budget and your lease pass-through review.

Environmental review

Office buildings are generally lower-risk than industrial sites, but not risk-free: a former gas station on the pad, a dry cleaner in the neighboring center, or older building materials can all surface. In practice, commercial lenders set their own environmental requirements, and many ask for a full Phase I; SBA lenders follow the environmental policies in SBA’s SOP 50 10. See our Phase I environmental site assessment guide.

Questions people ask

What occupancy classification is an office building?

Offices are Group B (business) under the California Building Code. Confirm the classification on the building’s permits, because some suites may have been approved for other uses.

Do I need a new certificate of occupancy when a new tenant moves in?

Often, yes. Requirements are local. Roseville, for example, requires one for a change in use, occupancy or tenant in an occupied commercial building. Ask the building department where the property sits.

Does my office building have to report energy use to the state?

If it is a disclosable building with more than 50,000 square feet of gross floor area, yes: the CEC requires annual reports by June 1 through ENERGY STAR Portfolio Manager, unless a qualifying local ordinance applies instead.

Which version of the energy code applies to my tenant improvements?

The CEC says the 2025 Energy Code applies to permit applications submitted on or after January 1, 2026. Your designer will confirm what your scope triggers.

Can I get an SBA loan for an office building I will partly lease out?

Yes, if you occupy at least 51% of an existing building’s rentable space; up to 49% can be leased. For new construction the test is 60% occupied, with up to 20% permanently leased.

Is a CASp inspection required before I buy an office building?

No. Civil Code 1938 requires lease disclosure of CASp status, and its required statement says state law does not require an inspection. Many buyers order one anyway to plan repairs.

How is buying a medical office building different?

Expect more specialized building systems, closer accessibility review and possible zoning differences. See our medical office guide.

Sources & notes

1. California Building Standards Commission, Codes (2025 Title 24 effective date).
2. City of Roseville, 2025 Certificate of Occupancy Packet (one city’s example; other jurisdictions differ).
3. California Energy Commission, 2025 Building Energy Efficiency Standards.
4. California Energy Commission, Building Energy Benchmarking Program.
5. Civil Code section 1938; official text on leginfo.
6. Civil Code section 1950.7; official text on leginfo.
7. SBA rules, 13 CFR 120.131 and 13 CFR 120.110; SBA SOP 50 10. Confirm current requirements with your lender.
8. California State Board of Equalization, Change in Ownership FAQs.

Statute links point to free mirrors with official leginfo text listed alongside; confirm the current version on leginfo. General information, not legal, tax or lending advice. Updated November 2026. Primary sources are linked in this guide.

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