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Office vacancy rates rise in 2009

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By Tim Tresslar, Staff Writer 7:59 PM Saturday, March 27, 2010

Office space vacancies in the Dayton area rose in 2009, the fourth straight year of increases as the region tries to climb out of economic recession, according to a study by the Gem Real Estate Group Inc.

The local market added more than 201,300 square feet of empty space last year, bringing total office vacancies to about 21.8 percent. In comparison, the 2008 vacancy rate for offices was 21.3 percent, according to Gem’s survey, which examined 335 properties.

“Are we at the bottom of the market?” said David Dickerson, president of Gem Real Estate. “I don’t know that. It’s hard to say. Hopefully, things will improve here as we roll out of recession and the market stabilizes.”

The survey yielded no surprises, Dickerson said. Growth related to Wright-Patterson Air Force Base kept the market east of Dayton healthy while the southern market continued to benefit from its proximity to Cincinnati, he said.

The zone that includes Beavercreek, Fairborn, Kettering, Riverside, Xenia and part of Dayton reported a 15.7 percent vacancy rate, compared to 15.8 percent in 2008.

Gem found that vacancies reached 26.7 percent in the northern and western markets, compared with 21.6 percent in 2008. This region — which includes Clayton, Englewood, Huber Heights, Trotwood, Vandalia and parts of Dayton — added about 74,300 square feet of vacant offices, the study found.

In downtown’s central business district, office vacancies reached 29.9 percent in 2009, compared with a vacancy rate of 31.3 percent during the prior year.

Last year’s results for downtown didn’t include 32-34  N. Main St., which housed KeyBank’s regional headquarters before the bank relocated to the 10 W. Second St. office tower in 2008. The North Main Street building was excluded from the survey because its owner, Aegon Realty Advisors, closed the building this year, Dickerson said.

The study also didn’t include the Fidelity Building and the Reibold Building. The latter building was scratched from the survey because it focuses on government tenants, making it closer to a county administration building and not something that Gem would include in its study.

Staff writer Tim Tresslar covers commercial and residential real estate for Dayton Daily News. His Real Estate Notebook appears every Sunday. He can be reached at (937) 225-7317 or via e-mail at ttresslar@coxohio.com.

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