Lease activity also strong, report reveals.
The year 2022 was an exceptional one for the Dayton-area industrial real estate market, according to a new summary of local activity.
The overall annual net absorption for the Dayton industrial market totaled 5,165,446 square feet, the highest yearly net absorption in history, according to a new report from real estate firm Colliers, which tracks trends.
Net absorption measures change in occupied space, taking into consideration vacated space and newly constructed space in a given market.
The numbers represent exceptionally strong industrial demand, noted Todd Cochran, a vice president for Colliers.
“Dayton really came alive,” Norm Khoury, brokerage senior vice president for Colliers, said in an interview. “We’ve never had so much product coming out of the ground.”
“We just had an explosion here,” Cochran said.
Collier’s executives noted that their company was not involved in all the deals tracked in the report.
Among the notable sales last year was the new GE Aerospace building, for $235.24 per square foot at 4230 Research Blvd, in the Miami Valley Research Park, Beavercreek. Colliers gave the price for that transaction at nearly $66 million, with Pure Development listed as the buyer.
Another big sale last year: the purchase of 10 industrial buildings with 22 tenants by Sealy & Company for $53.2 million, totaling just over 1.1 million square feet.
The Plymouth Industrial Real Estate Investment Trust also purchased nearly 397,000-square feet in Troy for $22.5 million.
Investment activity or purchases were “on fire” last year, at least until interest rates rose, Khoury said.
Lease activity was also strong. The report notes Komyo Logistics’ new lease of 210,000 square feet at 251 N. Dixie Drive, a site listed as the Park 70/75 industrial park building 8.
Also among lease deals, Ivex Protective Packaging renewed a lease of 240,000 square feet at 2500-2600 Campbell in Sidney, and Creative Foam’s agreed to a lease of 192,000 square feet at 6400 Sand Lake Road. Colliers was involved in the Ivex deal.
“The typically under-the-radar Dayton industrial market has reached new heights as it ends 2022 with a record high net absorption of more than 5.1 million-square feet,” the report said. “In Q4 alone, Dayton saw 1.4 million-square feet of net absorption, partly thanks to three major build-to-suit projects being completed and occupied.”
No one has a crystal ball, but Cochran expects demand to stay steady. At the same time, there are plenty of variables: War in Europe, the debt-ceiling question, interest rates and more.
The total vacancy rate for the market for the fourth quarter of the year was put at 3.4%, which was a 10-basis point increase from Q3, the report said.
The South submarket recorded the highest average asking rent at $5.21 coupled with a vacancy rate of 3.6%, Colliers said. New supply totaled 1.53 million square feet in the fourth quarter, but an estimated 3.2 million-square feet will be delivered in the first quarter this year.
Just more than 3 million-square feet remains under construction, maintaining a near-record low vacancy rate of 3.4%, the report said.