For commercial property in the Dayton area in 2008, this was another year where out-of-town investors came in to shell out big bucks for bargain buys.

A number of California and New York investors are looking at Dayton as a safe bet — a place where prices are steady and low right now — and they see the potential for a big return.

Investors were interested in hotels, office space and other commercial buildings.

One area in particular that has seen outside investment is warehouse and distribution space. For example, Covington Capital Corp., a real estate development and investment company based in Santa Monica, Calif., purchased two properties in the area within three months.

Mike Skunda, managing director of acquisition for Covington Capital, said the region is becoming a hot spot for logistics and distribution companies.

“Companies looking to distribute will identify this area the same way we have,” Skunda said. “They want to get the transportation savings.”

However, it wasn’t all about distribution in Dayton this year, so here are the top real estate deals of 2008 compiled by the Dayton Business Journal. Top doesn’t mean largest dollar amount. Other factors in the process include location, regional impact and significance.

Top Deals of 2008

1. As a part of Good Samaritan Hospital’s $55 million purchase of the Dayton Heart Hospital, Good Sam also purchased the 130,000-square-foot hospital building May 16. Good Samaritan purchased the hospital from and MedCath Corp.’s Heart Hospital of DTO for $23.8 million, according to the Montgomery County Auditor’s records.

2. Cincinnati Bell Technology Solutions Inc. purchased the 125-acre Fujitec America Inc. campus in Lebanon. The campus encompassed 350,000 square feet of office and manufacturing space at 401 Fujitec Drive. CBTS purchased the property for $16.2 million on Feb. 26.

3. Out-of-town investors were active in Dayton this year. One of the largest transactions was the sale of Teradata Corp.’s headquarters in Miami Township. A California investment firm purchased the 40,000-square-foot building from The Oberer Cos. for $7 million.

Bob McCann, chief operating officer for Oberer, said the company had been looking at trimming its portfolio, and selling this building made sense.

Jeff Johnston, senior sales vice president with Cincinnati-based Grubb and Ellis/West Shell Commercial Realty, brokered the deal. He said the principle investor, Roger Norman, was looking to diversify his holdings. He also said because the building was new — built by Oberer in 2007 — and fully leased, it was an attractive property.

“It’s a brand-new building, with a brand-new lease; it’s probably at its highest value,” Johnston said.

4. Another big investment this year was Covington Capital’s purchase of one of the most recognized buildings in the Dayton area, the Cooper Tire & Rubber Co. warehouse. The real estate investment company purchased the 770,000-square-foot warehouse from Cooper on Sept. 11 for $7.4 million.

As a part of its initial investment, the company plans on spending $2 million on renovating the building.

“We are touching every aspect of that building,” Covington Capital’s Skunda said.

Most of the work on the building won’t start until Cooper Tire moves out next August, but Skunda already is planning on carving up the building to turn it into a multi-tenant facility.

This was Covington Capital’s first Dayton-area property, but it wasn’t its last. In November, the group snatched up its second building in Dayton, the 120,000-square-foot Shopsmith Building at 6530 Poe Ave.

Digger Daley, second vice president with the Dayton office of Collier Turley Martin Tucker, brokered the deal. He said Dayton has become a hot bed of distribution activity because of its location along Interstate 75 and proximity to Interstate 70. 

“Once the area gets over the heartburn of GM and Delphi, I think we are ripe to have some significant growth,” Daley said.

5. Another example of Dayton’s viability as a good place to invest in industrial space was the sale of the Elder-Beerman distribution center in Fairborn. A California-based investor, Natdayton LLC, purchased the 278,000-square-foot building Feb. 14 from Property Associates LLC for $9.52 million.

6. Land for future development was another hot seller this year. On Sept. 19, RLG Miami and KGS Miami Ltd. purchased at least 25 acres of land along Austin Road from MV Austin Pike Land LLC et al 3, according to Montgomery County property records. The land was purchased for just under $6 million.

The property sits just east of I-75, near the proposed Austin Road Interchange that is expected to break ground in early 2009. The interchange, a $48 million project that is expected to bring an explosion of development south of Dayton.

Most of the land is controlled by Centerville-based R.G. Properties Inc.

7. Another large land sale this year went to CarMax Inc. The largest seller of used cars in the United States purchased a 15-acre parcel of land at I-75 and state Route 725 on Jan. 9. The Richmond, Va.-based company built a CarMax Auto Superstore on the site. Kelly Gray, vice president for sales and leasing for Richard Flagel Realty, represented the seller, Chuck George Interstate Ford. Skip Schafer of Commercial Realty Associates Inc. represented CarMax.

The auto store is expected to be open in early 2009.

8. Downtown Dayton got in on the action this year with two large-scale sales. The 40 West Fourth Centre was purchased by a New York-based investment group Aug. 1. The Matrix Realty Group LLC purchased the 224,800-square-foot building from Union Central Life Insurance for $3.8 million.

Glen Nelson, chairman of The Matrix Realty Group, said he purchased the building because of its tenants. The building is about 94 percent occupied, with 15,000 square feet of vacant space.

Nelson also said he plans on making a substantial investment in the renovation of the 22-story office building.

Tom Nikolai, vice president/general manager for Centerville-based Mark Fornes Realty Inc., helped Grubb and Ellis/West Shell Commercial broker Jeff Johnston represent Union Central on the sale.

Nikolai said this sale is an example of outside investor’s interest in the Dayton market because the building had only been on the market for one month and received seven letters of intent from investors.

“It’s a sign that the investment market for properties in the Midwest is still strong, based on the number of buyers interested,” he said.

9. The other major downtown sale this year was the Crowne Plaza Hotel, which was sold for $6.1 million. Washington, D.C.-based CWCapital purchased Dayton’s second-largest hotel from Cedar Hollows Partnership in September.

Jeff Baumgardner, general manager of the Crowne Plaza, said CWCapital, along with new management group Fairfax, Va.-based Crescent Hotels & Resorts, would aim for improving the hotel’s operations and occupancy rates.

The Crowne Plaza also is in the midst of a $3.5 million renovation, which Baumgardner said would be improved with the new ownership.

10. The final entry on the list comes from Vandalia, as Triad Technologies LLC purchased a 66,000-square-foot facility in Northwoods Business Park. The $2.3 million deal was brokered by Daley on behalf of the seller, which was Parker-Hannifin Corp.

This sale marks a number of moves from one space to another in the Dayton area, as companies grow, shrink, close and expand.

Moving into 2009, brokers are cautious as the economy continues to waver, the financial crisis has yet to improve and many who would be in the market for new space are waiting to see what happens.

2008 Top 10 Real Estate Deals