Downtown’s newest office building will boost one of the city’s most thriving areas

Another office tower shows demand for new, renovated spaces in urban core.

A new office building is headed to the Water Street District, further solidifying the area as one of the most thriving parts of the city.

Dayton has one of the highest office-vacancy rates in the nation, owing to much of the space being outdated and obsolete However, new and renovated spaces in the urban core often have filled up quickly, providing a possible pathway for future development.

“We have to continue to provide office options that prospects need and want,” said Sandy Gudorf, president of the Downtown Dayton Partnership.

Woodard Development and Crawford Hoying, the developers of Water Street, plan to construct a two-story building on the 500 block of Monument Avenue offering about 25,000 square feet of space.

The project will create retail space and class A office space, which is in strong demand in the area, said Jason Woodard, principal of Woodard Development.

The developers have talked about constructing a second office building in the district for several years. But the project finally looks to get underway in the first quarter of 2019.

The developers have been busy transforming downtown with new apartments, amenities, restaurants and the first new hotel in decades.

MORE: Downtown Dayton development to add second office building

The Water Street District’s four-story office building opened in 2015 and is fully occupied. Tenants include PNC Bank, Bricker & Eckler LLP, Snap Fitness, Shops by Todd and Basil’s on Market.

The new office building will be constructed on a grassy field owned by the city of Dayton. The developers for years have had a purchase option for the 1.3-acre site.

Woodard said the district could use more offices, given the positive activity at Tech Town and the success of the district’s first commercial building. Tech Town, which has three fully occupied office buildings, is just east of the property, across Webster Street .

Woodard said the developers want to offer options for companies that need more than 15,000 square feet of space.

He said he’s not sure what the mix of uses will be in the building, but says there’s been interest from a diverse group of potential tenants.

The new office building will be erected on one of the few remaining large empty lots in the downtown area. Another large and previously vacant property along the 100 block of East First Street is occupied by CareSource’s office tower.

Vacant land for new buildings is hard to come by, but Gudorf and others believe plenty of downtown spaces can be renovated for office use.

Gudorf pointed to office building investments including the recent purchase of the 11-story Courthouse Plaza by Chris Riegel, the founder and chief executive of Stratacache Inc.

She also noted the purchase of the 23-story 130 W. Second St. building by a former Boston-area chief executive.

People want to be downtown, and developers are finding ways to make older commercial spaces appeal to modern office users, she said.

MORE: What's next for the developers of downtown's Water Street District in DaytonWoodard Development also is working to revive two commercial buildings on the 600 block of East Third Street to create new offices and commercial space.

A building at 607 E. Third St. called the Avant-Garde will have five floors of technology and office space and an elevated restaurant, according to Woodard’s application for a commercial community reinvestment area.

The start-up, Tangram Flex, has announced it will move into the property. Last week, the Dayton city commission approved a 15-year tax abatement agreement benefiting the roughly $4.5 million rehab project.

In October, Woodard closed on a two-story building at 205 E. First St. The building, which has about 14,000 square feet across two floors, is home to Pinnacle Architects and once housed the HomeOwnership Center.

The building is expected to remain commercial space.