DaytonDailyNews.com

Vacant office space in downtown Dayton skyrocketed last year, driven in part by departures from the city by major companies.

About 462,600 square feet of office space — the equivalent of a multi-story office tower — went dark last year in Dayton's central business district, according to a study by Gem Real Estate Group, a Dayton brokerage and research firm.

The proliferation of empty space brought the downtown's total vacancy to 1.4 million square feet, or about 27.5 percent, versus 18.2 percent the previous year, the study found.

Empty Class A office space in downtown climbed to 26.8 percent in 2007, with an additional 222,800 square feet of office going empty in 2007, versus 16.5 percent during the year before that.

About 28 percent of downtown's Class B/C office space was unused last year, with nearly 240,000 square feet of empty space being added in that category, compared to 19.6 percent vacancy in 2006.

MeadWestvaco Tower accounted for the largest single chunk of new vacant office space in the business district — about 285,000 square feet, the study states. The building's major occupants, MeadWestvaco and NewPage Corp., have shifted hundreds of jobs out of the 10 W. Second St. building to Kettering and Miami Twp., Montgomery County, respectively.

In addition, Kettering Tower, which Gem represents as leasing agent for office space, reported 122,000 square feet, or about 26.6 percent of the building, was empty.

"Unfortunately, the market's been hit pretty hard," said David Dickerson, president and chief executive for Gem Real Estate. "There isn't much to say other than there's a lot of vacancy downtown."

Steve Budd, president and chief executive of CityWide Development, said the addition of new offices in places such as The Greene in Beavercreek has increased competition. But he added that such downtown projects as CareSource's new headquarters and parking garage, TechTown and Ballpark Village will generate some excitement about downtown, which could benefit its office market.

In the meantime, regional vacancy rate for offices climbed to 18.2 percent, compared with 14.6 percent in 2006.

And, in the suburban market, about 1.4 million square feet, or 13.6 percent, of total office space was reported empty, whereas vacancies for the same area was 12.8 percent in 2006.

The eastern suburbs, which includes Beavercreek and Fairborn, continued to do well thanks to growth related to Wright-Patterson Air Force Base and the proximity to Interstate 675, Dickerson said.