IRR-Dayton Mid-Year Viewpoint 2015 Local Market Report - Office
The office sector throughout the Greater Dayton area is fairly stable with minimal improvement over the last few years. Vacancy in the CBD has shown virtually no improvement recently. Vacancy in the suburban market has decreased, slowing in the last twelve months. No new construction is occurring in the CBD and there is minimal construction activity in the suburban markets.
Rental rates for the Dayton CBD are stagnant with minimal improvement in recent years. Rates in the suburban Class A office market have begun to inch upward which began in 2010 and with larger increases indicated in 2015. Class B rents have seen increases in the suburban markets as well over this time period but at a modest pace. Overall, suburban rents are expected to continue to slowly increase in the future if vacancy continues to decline.
The Dayton office market will benefit from a stable to slightly growing population base and higher income and education levels. Although the Dayton MSA experienced little change in the number of jobs over the past decade, job growth turned positive in 2011 and has remained so. The Dayton area has maintained a generally lower unemployment rate than Ohio during this time. Moreover, the Dayton MSA exhibits both a higher rate of GDP growth and a higher level of GDP per capita than Ohio overall. All of these factors will continue to support the current recovery.
Over the long term, the Dayton MSA will be affected by a stable to slightly growing population base, lower income and education levels. Dayton MSA experienced a substantial loss of jobs over the past decade, and the future trend in employment is difficult to forecast. Moreover, economic weakness is evident in the decline of Gross Domestic Product (GDP) at the Dayton MSA level. Considering all positive and negative factors, we anticipate that growth in the Dayton MSA will be limited, resulting in a modest level of demand for real estate in general. Based on these trends, the office market will slowly improve but at a slow pace and one which is expected to continue into the foreseeable future, primarily in the suburban market.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.