By James Flick, Vice President of Research and Marketing
According to a September 23rd release from the Bureau of Economic Analysis, the Dayton regional gross domestic product grew just 0.3% in 2014, well below the national average of 2.3%. One positive sign in terms of office real estate market was that professional and business services were the strongest driver of GDP growth in the Dayton market (0.37%).
Despite the minimal growth in GDP, the region’s job market continues to improve slightly. In 2010, unemployment rate reached as high as 12.9%, currently it sits at 4.5% or 60 basis points better than the national unemployment rate. In the last 12 months the region has added approximately 5,000 jobs. Unfortunately, total employment remains lower than pre-recession levels, a product of manufacturing losses, infrastructure issues, and an aging population. Dayton is not alone in its struggles. Over 40% of the major metros have not yet recovered all the jobs lost to the recession. Dayton’s location and associated attractiveness to logistics companies will hopefully fuel additional economic growth moving forward.
While the economy may be taking small steps; the office market seems to be making larger strides in terms of recovery. The region has now seen five straight quarters of positive net absorption as another 49,831 square feet was absorbed in the third quarter of 2015. On the year, over 125,000 square feet of previously vacant space has become occupied by area businesses.
In the last 12 months area vacancy has improved 180 basis points from 25.9% to 24.1%.
The average asking rental rate remained flat at $14.60 per square foot overall and at $18.35 per square foot for class a space.
No significant increases in rents are expected in the near future, but could come if the vacancy rate continues to decline creating more of a landlord marketplace versus the tenant marketplace that currently exists.
To read the full report and to get access to all the Third Quarter Cincinnati and Dayton MarketBeats visit http://dtz.cassidyturley.com/markets/us/cincinnati-dayton
James Flick joined the company in 2010. As Vice President, Research and Marketing, he is responsible for overseeing the Marketing and Research activities in our Cincinnati and Dayton offices. This includes the production of presentations, studies, and statistics on topics affecting the regional economy as well as the local office, industrial, retail and multi-family markets.