Dayton Industrial Market Continues Positive Momentum
As other industries struggle due to the Covid-19 pandemic, the Dayton-area industrial market continues to see positive momentum.
Colliers International has reported the Dayton industrial market recorded positive net absorption of 417,000 square feet during the fourth quarter of 2020, and the overall market vacancy rate decreased by an additional 20 basis points to 5.8%. Seven consecutive years of positive net absorption, coupled with minimal speculative construction, has accounted for an occupancy gain of nearly 14 million square feet.
Over that timeframe, overall market vacancy has plummeted in excess of four percentage points to 5.8%. Even so, Colliers reports that construction activity remains limited. Only one speculative building is currently underway — the 500,000-square-foot Park 70/75 Building 8 adjacent to the Dayton International Airport.
It remains to be seen if the success of this logistics park by NorthPoint Development spurs additional activity, Colliers says. Other sites are available in the immediate vicinity, but most developers are waiting for a tenant to commence construction. The location, near the crossroads of Interstate 70 and I-75, as well as the airport, has the potential to grow into an even more prominent site for logistics operators.
The balance of facilities under construction are build-to-suit projects for a variety of manufacturing companies. In the fourth quarter, General Motors completed its 251,000-square-foot truck engine plant. While the closure of GM’s Moraine auto plant in 2008 dealt a major blow to the region’s manufacturing base, the automobile industry and its suppliers such as Fuyao Glass America — the company that took over the GM plant — remain active in the area.
Other notable industrial projects in the region include:
- Pratt Paper leased a 392,000-square-foot manufacturing facility near the airport in February 2020.
- Ali Industries leased a 259,000-square-foot bulk warehousing facility in Fairborn in August 2020.
- Crown Packaging leased a 105,133-square-foot warehousing/distribution facility at 209-225 S. Alex Road in West Carrollton in June 2020.
- Pratt Industries subleased an 81,000-square-foot bulk warehousing facility at Park 70/75 Building 3 near the airport in January 2020.
Industrial vacancy across the Dayton region ranges from a low of 2.2% in the north submarket, which includes the growing logistics hub at the Dayton International Airport, to a high of 25.3% in the west submarket, which is primarily due to one large available block of bulk warehouse space totaling 601,500 square feet.
The overall market average asking rental rate is currently $3.70 per square foot, an increase of 2.6% year-over-year. Asking rates for the bulk warehouse sector have increased by 5.1% year-over-year to $4 per square foot, reflecting the lack of high-quality, modern logistics space in the market, Colliers stated.
“The recent approvals and distribution of vaccines offer hope that this pandemic will soon be a recent, then distant memory,” Colliers stated. “But the trends accelerated by this black swan event, along with new habits and preferences established over the past 10 months, will remain, many of which will continue to generate demand for additional modern warehouse and manufacturing facilities.”