By Richard Meder, Colliers
While office markets across the country have experienced a slow climb back to normalcy following COVID-19-related restrictions, the Dayton office market has found its strength in the Wright-Patterson Air Force Base (WPAFB).
Though the Dayton office market around WPAFB experienced similar ebbs and flows as that of the rest of the country during the pandemic, business never stopped. For some in other markets, the lasting effects of this disruption to the office market remain unknown.
Business leaders must decide whether to implement a remote work lifestyle into their employee regimen or make a push to get back to normal office life — for some companies it is considered a hybrid approach. For the tenants in the WPAFB submarket, however, there was never question.
While many office tenants vacated their spaces out of uncertainty, defense contractors cautiously occupying office spaces at the WPAFB submarket almost singlehandedly helped Dayton remain upright during the pandemic. With the submarket almost entirely consisting of defense contractors, this type of defense contracting work was not allowed to stop with the rest of the world.
Having to adhere to both local and federal guidelines, decision-making among defense contractors certainly slowed, but it never stopped.
The Dayton market stability can be partly credited to the type of work being done by defense contractors at the base. Historically, WPAFB has been very logistics oriented. Though these roots remain, there has been an increasing presence of intelligence-based programs being funded out of Washington, D.C. These programs bring different kinds of tenants to the region than what we’ve previously seen — people that are familiar with new and emerging technologies.
As one of the largest employers in the Dayton area, this transition in defense contractor work also brings a transition to the labor market. Leaders and managers working around WPAFB appear to be hiring more aggressively than what has historically been the standard. What interests these hiring managers most is talent, skill, intellect and ingenuity.
This shift to a more intelligence-based user cannot be attributed solely to the base, however. In January, Intel announced the investment of more than $20 billion in the construction of two new facilities near Columbus. This move is expected to affect the Dayton office market positively thanks to two major factors: proximity and affordability.
Businesses have started to realize that Dayton is only an hour-and-a-half away from Columbus, and it already houses a technologically inclined workforce, thanks to WPAFB. Business leaders are starting to look at Dayton as a serious contender for their regional and national headquarters. While the Intel deal is anticipated to affect the entire state of Ohio, it’s likely the Dayton market sees a higher impact because of what WPAFB already offers the region.
The other driving factor in the Dayton and WPAFB market’s steadiness is the region’s affordability. As inflation rates skyrocket across the country, it’s hard to ignore the effect Dayton’s more reasonable cost of living has had on the office market.
People coming in from the West Coast and the Silicon Valley are finding the Midwestern lifestyle to be more suitable and affordable than what they’ve experienced on the West Coast. Those who are doing defense work in Dayton find themselves wanting to stay in Dayton and establish roots of their own.
The cities around the base — Dayton being the driver — have already started to recognize the strength of the economic benefits of the base. The Dayton office market will continue to look bright for the future. Dayton has positioned itself well to take advantage of the technology growth centered around the WPAFB.
Richard Meder is a senior vice president with Colliers Cincinnati. This article originally appeared in the July 2022 issue of Heartland Real Estate Business magazine.