Overall, the office market in the Dayton region continues to recover, but at a moderate rate. Throughout the course of 2013, the South market has been the most active, with the majority of the activity at Austin Landing and areas along St. Rt. 741 and I-675. The North market is seeing some redevelopment happening with the acquisition of two office buildings on Poe Avenue by Stratacache. The Central Business District continues to attract both buyers and tenants looking to take advantage of the aggressive lease rates and acquisition prices of buildings. The result has been increased activity downtown, more than we have seen in several years.
Over the past year, the East market, typically one of the strongest markets, has been weaker due to the impact of sequestration and defense cuts. The deals that occurred were generally smaller and the overall activity was down compared to what was normally seen in the area. At this point, there is hope that the area will adjust to the budget cuts and improve as defense contractors learn how the budget cuts will ultimately affect their business. One area with good growth this year in the East market was The Greene which continues to attract both office and retail users, often new to the market.
Moving into 2014, we anticipate that the South Dayton office market will lead in attracting the most users in the region. Austin Landing has proved to be an area with high rates of growth and development and it will continue to bring new office transactions in the coming year. The North market will continue to improve with the redevelopments of some of the older buildings along I-75 and existing space will continue to fill up now that there is some new building ownership. The Central Business District is projected to continue to be active, offering aggressive deals. The East market will most likely continue to be weak but should improve, especially if UAV (unmanned aerial vehicle) related activity begins surfacing.
Recent notable deals for the year include TriCom B2B and Midmark moving their headquarters downtown, as well as Business Furniture moving to the Central Business District. Stratacache and Buchanan Technologies both made recent transactions in the North market as well as Wells Fargo, EBS and Merrill Lynch in the South market.