The owner of the vacant Heironimus building in downtown Roanoke has lost a chance to land a law firm as a signature tenant, but he said Monday he is confident market conditions are favorable for the signing of a significant lease this year or in early 2008.

Area merchants say that would be none too soon.

Lawyers at Gentry Locke Rakes & Moore considered leasing the Heironimus property, built as a furniture store in 1905 and used for retailing for decades before falling vacant in 2005.

However, the law firm, with some 50 attorneys, has decided to stay in the seventh and eighth floors of the SunTrust building downtown and wants to lease the sixth as well, said Mike Pace, managing partner.

"We did seriously consider it, and we did rule it out," Pace said of the Heironimus structure, at 401 Jefferson St. S.W.

Nevertheless, Heironimus building owner Calvin Powers said he is pleased by what he called the strength of rates for rental commercial space in the central business district, of which the Heironimus building is a part. Had he leased the building's 75,000 square feet to a tenant, say, five years ago, the tenant would be paying low rates compared with what the space would command today, he said.

While lease-rate trends vary because of the diversity of commercial properties downtown, commercial real estate broker Michael Waldvogel said several office buildings do command higher lease rates today than in the past, using 2000 as a point of comparison. The BB&T building, which leased for $12.50 a square foot per year in 2000, would have cost a new tenant $17.50 in the first half of 2007, said Waldvogel, of Waldvogel Commercial Properties.

Powers thinks his building is one that has appreciated in rental value.

"It's probably made us more money sitting empty with the rates going up than it would have if we rented it," he said.

But furniture and accessories retailer Dorie Howard thinks having tenants now would leave nearby downtown retailers better off.

"That building, something needs to be done," Howard said. "It's dangerous. It's an eyesore," she said.

Not only has a large window been boarded up for some time, a letter H fell from a sign on the building five stories up and landed with a crash on Church Avenue outside her store, Retrospect Interiors, she said. It went out with the trash.

Waldvogel is among those in the real estate community who share the general sentiment that the Heironimus building represents a big opportunity. He said few things would benefit downtown more than the redevelopment of the Heironimus building, given that it represents 75,000 square feet of space in the virtual center of downtown.

"We're going to do something with the property. The time is getting somewhere close to do something with it. Almost everything else downtown is sold out," Powers said. "We're looking for a good, sound lease. It will be the next six to eight months."

Powers declined to specify what rent he expects to receive for the property, a five-story structure that fronts on Jefferson Street in the heart of the downtown business district. Powers said it is not for sale.

As Powers knows, downtown remains a desirable business address, in spite of a loss of many stores.

Office space was 94 percent occupied in 2006, unchanged from the previous year, according to a January study by Poe & Cronk Real Estate Group. By comparison, office space north of downtown posted an occupancy rate of 86 percent, and office space to the south posted an occupancy rate of 79 percent.