Dayton, OH, USA

 Downtown Dayton faces a tough battle.

The vacancy rate has been on the rise for years. The mid-year vacancy rate in the central business district has climbed to nearly 34 percent, from 28.6 percent at the end of last year, according to Colliers Turley Martin Tucker’s latest market report. Aging buildings, too much space, not enough convenient parking, competition from the suburbs, security issues and a general decrease in demand all play a role in the emptying of Dayton’s core.

And officials contend a weak downtown ripples into the overall health of the Dayton area.

While brokers didn’t create these problems, they have to find solutions to them so they can better serve their clients.

Parking has long been a problem in downtown Dayton. Despite plenty of places to park in the city — with more than 20,000 spaces — few are connected or directly next to office towers, meaning tenants must contend with a bit of a walk.

Kelly Gray, vice president/broker with Equity Inc., said tenants want their parking to be right next to the office door. She said the buildings with attached parking, such as the Kettering Tower and the 40 West Fourth Centre, have the highest occupancy. Kettering Tower posts a 77 percent occupancy rate and the 40 West Fourth Centre has a 95 percent occupancy rate.

Security has long been a touchy subject when talking about downtown. According to the Downtown Dayton Partnership, crime in the central business district accounted for 5 percent of the crime in Dayton in 2007. Yet, crime dropped 26.5 percent from 2006 to 2007.

But brokers said the perception of crime remains as bad as actual crime.

Mark Fornes, owner of Centerville-based Mark Fornes Realty Inc., said security remains an issue, whether it is viewed as reality or perception. He said the problem is directly related to the large crowds that gather at the corner of Third and Main streets, near the Greater Dayton Regional Transit Authority Station.

Fornes has a building for sale at Third and Jefferson. It’s been on the market for four years. He said it likely won’t sell until Dayton eradicates any sense of security issues.

“Security is the death knell of real estate,” Fornes said.

Although security is still viewed as an issue downtown, Dayton has come a long way in the past few years. Programs such as the Downtown Dayton Ambassadors have put a fresh face on the city and take a step in improving the perception of security issues.

Paul Miller, vice president of the Dayton office of CB Richard Ellis, said downtown Dayton has improved in the past 10 years with a better look and feel. He points to the work of groups such as the Downtown Dayton Partnership as improvements for the city. He said he feels like the city has its best dress on.

The city is currently undergoing millions of dollars worth of street renovations and will be starting on stimulus-funded improvements in the near future.

Another possible boon for downtown is the proposed restoration of the Dayton Arcade. Purchased earlier this year by investors from Wisconsin, plans call for $30 million to be raised to fund the restoration of the 250,000-square-foot complex.

Miller said a successful Arcade restoration would play a role in the rest of downtown Dayton’s future.

“A renovated Arcade could tremendously help downtown,” Miller said.

Dave Dickerson, president of Gem Real Estate Group, said the Dayton region needs a strong central core. Because the city has a high income tax compared to surrounding areas, he said it’s going to take competitive lease rates and access to good parking to make downtown a viable option.

About Colliers International

Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 12,700 employees span the world in 294 offices in 61 countries. On a worldwide basis, Colliers manages 1.1 billion square feet, and has revenue of $US 1.6 billion.

Contact Information

Crystal Kirkland, APR
Marketing Manager

Colliers Turley Martin Tucker
3033 Kettering Blvd., Suite 111
Dayton, OH 45439
(937) 424-2453 (direct)
(937) 228-4909 (fax)
CKirkland@ctmt.com 
www.ctmt.com 

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