The project will provide much-needed offices for entrepreneurs and small business owners at the Hub at the Arcade who want to expand, city officials said. Windsor Companies is working with the city and the Entrepreneurs’ Center to create “graduation space” for entrepreneurs, said Dayton City Manager Shelley Dickstein.
“As they grow and graduate out of the Hub, they need space that is affordable and many of them want to stay in downtown and we want to keep them in downtown,” Dickstein said.
The Dayton City Commission recently approved a development grant agreement with Windsor Companies worth $500,000 to help pay for exterior and interior building improvements to the historic Deneau building at 40 W. Fourth St.
Windsor Companies, the main developer of the Fire Blocks District in downtown, has rehabbed the office tower and converted most of the upper floors into 147 apartments. The company has been working to create new office space on some of the lower floors of what was the city’s first modern skyscraper.
The city’s investment can help the Deneau, which was formerly called the Grant-Deneau Tower, become a vibrant center for growth that attracts new business activity, contributes to job creation and supports future tenants with long-term stability, says a memo from Steve Gondol, Dayton’s director of planning, neighborhoods and development.
Veronica Morris, Dayton’s director of economic development, said the project supports revitalization, adaptive reuse and increased commercial and residential activity that is important to the long-term growth of the city’s tax base.
“The market drives private investment, private investment drives job creation, and this project is expected to help position the property to become a vibrant center for growth,” Morris said.
Morris said city development grants are supposed to help close financing gaps of 15% or less for projects that might not otherwise move forward without public dollars. The $500,000 comes from the city’s Remote Tax Increment Fund within the city’s capital project fund, she said.
“The Remote TIF captures incremental property tax revenue generated by targeted downtown development activity and allows those funds to be reinvested in qualifying projects elsewhere in the city,” Morris said.
The development agreement says the Deneau’s commercial tenants will make “every reasonable effort” to hire city residents to fill new job positions.
Last year, Dayton’s Central Business District had the highest office vacancy rate of any central business district across 78 U.S. metro areas and 114 submarkets, according to a November 2024 post by an economist with Moody’s. Moody’s said the Dayton CBD’s vacancy rate was 37.8%.
More recent Dayton office market data published by Colliers for Q3 of 2025 says the office vacancy rate for downtown and the urban core was about 30%. That’s up from about 28% in Q3 of 2024.
Downtown and the urban core has about 5.4 million square feet of office space inventory, and nearly half of that is Class A product, Colliers said.
“The Dayton office market showed signs of stability in Q3, posting negative absorption, albeit slight, along with a stable vacancy rate and an increased average rental rate,” Colliers said about the overall Dayton market. “In a famously uncertain period for office space, Dayton posted a low-variability quarter, potentially in preparation for a rebound.”
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