Office vacancy rates climbed last year
Sunday, April 05, 2009
DAYTON — The amount of office space sitting empty in downtown Dayton and many of the suburbs climbed last year, according to a study.
Across the region, nearly 3.2 million square feet office space was empty when the study was conducted last year, according to a study by Gem Real Estate Group, a Dayton-based brokerage and research firm. This translates into a vacancy rate of 21.27 percent, compared with 18.2 percent during the prior year, the study said.
While downtown Dayton's vacancy rates grew in 2008, the total amount of new vacant space coming on the market fell below levels seen in 2007, the study found.
Vacant office space in the downtown reached nearly 1.6 million square feet in 2008, bringing the vacancy rate in Dayton's central business district to 31.3 percent, compared with 27.5 percent in the prior year. More than 185,000 square feet of office space went vacant.
In 2007, Gem found that more than 462,000 square feet of office space went dark in the downtown. Departures by MeadWestvaco and NewPage Corp. from 10 W. Second St. added about 285,000 square feet of empty space to the market. KeyBank last year moved into the building, taking the building's top three floors and also adding a branch in the lobby.
In suburban Dayton, the amount of empty office space reached 1.6 million square feet, about 16.27 percent of the market, up from 13.26 percent in 2007, the Gem study found. More than 277,000 square feet of the vacant space recorded went dark last year.
In the east suburbs — an area that includes Beavercreek, Fairborn and Riverside — the study found nearly 515,000 square feet of empty space. This means the eastern suburbs as a whole had about 47,000 square feet of space come on the market, bringing the vacancy to 15.78 percent versus 14.3 percent a year ago.
In the south suburbs — an area that includes Kettering, Centerville, Oakwood and Miamisburg — empty office space accounted for 794,000 square feet, or 15.1 percent of the market, compared to the 11.4 percent vacancy rate in 2007's study.
The addition of new offices at The Greene in Beavercreek has led to some tenants shifting to that location and away from downtown and other suburbs, said Mark Fornes, president of Mark Fornes Realty. Downtown also needs more new office space than it currently has, he said.
That trend may continue. As the land around the Austin Road interchange develops, Fornes said the Dayton region eventually will add more offices to the south. While this will place additional pressure on some downtown and suburban office properties, Fornes also said it will keep Dayton competitive.
"It's good for the region because we might be able to attract and retain some larger companies that we might not otherwise have a shot at getting," he said. "Strategically, it's good for the region."
