Vacancy remains prohibitively high in the Dayton general purpose multi-tenant, office market. Dayton still retains the dubious distinction of the highest vacancy rate for Reis’ top metros. The second quarter rate is 27.2%, down 10 basis points from the prior quarter and up 80 over 12 months. First Glance data from Reis put the third quarter rate at 27.3%. The Class A rate is reported at 24.2%, down 40 basis points from the prior quarter and the Class B/C rate is reported at 28.8%, up 10 basis points from the first quarter. The problem here is not overbuilding, it is no net absorption. From 2002 to 2011 a mere 846,000 square feet completed, to average about 85,000 square feet per year. During that time span, net absorption totaled negative 1.55 million square feet. There has not been a year of positive net absorption since 2006, at 82,000 square feet. First and second quarters have totaled 38,000 square feet on the negative side. Construction has picked up. Reis reports three projects have completed so far in 2012, one a medical office and the other two general purpose office buildings totaling 219,600 square feet. One is the Colonel Glenn office campus, at 99,800 feet, which Reis has down for completing in September of this year and is noted for a fall opening in the Special Real Estate Factors.
Reis reports average asking and effective rents of $14.46 psf and $10.90 psf, up 0.1% and down 0.1%, respectively, for the quarter, and down 0.3% and 0.2% year-over-year. First Glance data gives a third quarter asking rent of $14.47 psf. Reis reports Class A asking rents of $16.75 psf, and Class B/C asking rents of $13.24 psf. After little or no growth in 2012, rents are forecast to post increases in the 2.0% range in 2013.
According to Cassidy Turley, total second quarter office vacancy is 26.1%. The average asking rent is $14.32 psf, and year-to-date net absorption is 144,405 square feet. This source reports on a considerably larger market of 13.8 million square feet.