The activity level in the local commercial real estate market is likely to remain close to the status quo for the short term, but could show some pockets of growth in 2013.
The headlines last year were dominated by activity in southern Dayton, surrounding the Austin Boulevard interchange, and the east market around Wright-Patterson Air Force Base. With little variation, real estate experts expect those markets to remain strong in 2013, although uncertainty about sequestration could slow down growth in Beavercreek.
The east market — the communities touching Wright-Patterson Air Force Base including Beavercreek and Fairborn — may see demand for office space slow down if sequestration delivers significant cuts to Wright-Patt. But in the long-term, the east market is still expected to be one of the strongest growth areas for the region.
The east market never took the hit other areas in the region did, meaning there is less vacancy to fill, said Danielle Kuehnle, sales and leasing agent for Oberer Realty Services in Miamisburg. The city of Beavercreek is quickly running out of real estate near the base, which means the natural progression of office development will lead to an eventual building boom in Fairborn, especially around Dayton-Yellow Springs Road, she said.
“I’d say we’re hoping to see the progression increase in 2013, but that I think will be years in the making,” Kuehnle said.
Mills Development, which is responsible for all of the new Class A office space on Pentagon Boulevard along Interstate 675 in Beavercreek, has partnered with Oberer for future development of The Point at Valle Green North, which is located along I-675 off of Dayton-Yellow Springs Road.
The south market will continue to be dominated by activity at Austin Landing, as leasing and construction is expected to pick up at RG Properties’ 142-acre mixed-used development this year. The groundbreaking for five new restaurants coming to the development is expected to happen this year, with opening dates as early as the end of the year, or early 2014.
Another long-awaited development in the southern market is Oberer Construction Company’s Cornerstone of Centerville. The project — on the Dille property at Wilmington Pike and Feedwire Road — has been on hold in 2012 as the developer and the city of Centerville worked out a development agreement, but Kuehnle said the two parties have made good progress and construction could start in the summer.
“We have a couple of outlot tenants under contract,” she said. “It’s been exciting and there is a lot of momentum right now with that project.”
Kuehnle said she expects to announce several tenants as they sign leases throughout 2013.
Tim Albro, partner with Dayton-based Crest Commercial Realty, thinks the housing market in the south could also be impacted by sequestration if it results in heavy cuts at the base.
“A lot of folks that work on or near the base live east and south,” he said. “If they’re being asked to take cuts in income because the contracts they’re working on are being cut, we could see housing decisions delayed, or forced sales of housing.”
Another area that is gaining momentum, but has lagged far behind the rest of the region for the past few years, is the downtown Dayton market.
“I still think you’ll see some activity occurring with some of the energy around the downtown core developments of CareSource and Premier Health Partners and UD,” said Dave Dickerson, president and partner of Dayton-based Miller-Valentine Gem Real Estate Group.
Downtown has already seen a win early in 2013 with the announcement that TriComB2B, one of the area’s top marketing firms, is taking over 18,000 square feet in the Schuster Center.
Improvements to the recreational opportunities available along the river with the dam removal project are expected to be a boost to downtown’s image as a vibrant urban scene, which could help attract more companies, Dickerson said.
“I still believe there’s going to be an interest in companies that want an urban feel to a location,” Dickerson said. “Especially a lot of companies that are more IT-related. Engineering-type companies that have a younger employment base that want that type of urban feel, being located close to some of the trendier restaurants.”
While the area should see some modest growth in 2013, the activity level is unlikely to return to levels that would support any kind of speculative real estate development, like what was popular in 2008, Dickerson said.
Commercial Real Estate Quarterly
Dayton Business Journal