News Summary
The industrial real estate market in Greater Cleveland is experiencing a slight uptick in vacancy rates, now at 3.3%. This increase is minor and signals a stable demand for industrial spaces, contrasting with rising vacancy rates in the office sector. Despite a decrease in asking lease rates and negative absorption of space, local brokers predict consistent demand driven by manufacturing, logistics, and food distribution sectors.
Greater Cleveland is experiencing a slight loosening in its industrial real estate market, with a current vacancy rate of just 3.3%. This marks a small increase from 3.2% in the previous quarter and continues a trend of low vacancy rates that have remained below 3.5% since the third quarter of 2022. Despite this minor uptick, real estate brokers anticipate that vacancy rates will remain in the low single digits for the foreseeable future, indicating a stable demand for industrial spaces.
The industrial sector in Greater Cleveland is notably outperforming the office market, which is witnessing rising vacancy rates from approximately 16% to nearly 18%. Notably, the total availability rate in the industrial sector has climbed to 5.7%, up from 5.2% in the first quarter of the year. This rate encompasses spaces that are available for sublease, suggesting an increase in the overall supply of industrial space on the market.
In terms of leasing trends, asking lease rates for industrial properties have decreased by 17 cents per square foot, now standing at $5.35, the lowest level observed since the fourth quarter of 2021. The rental rates vary across the region; for instance, some areas, primarily in the eastern part of the market, have lease rates reaching as high as $8.17 per square foot, while rates in the northeast section can drop to $3.87
An unfavorable trend noted in the latest data is the negative absorption of 138,000 square feet during the quarter. This indicates that more space is being added to the market than is being leased. A significant contributor to this negative absorption was Harvest Sherwood Food Distributors, which vacated nearly 300,000 square feet in a cold-storage facility located in Maple Heights.
Currently, there is approximately 990,000 square feet of industrial space under construction throughout the Greater Cleveland area. Most of this new construction activity is concentrated in Middlefield, where HC Cos. is working on a 750,000-square-foot distribution facility. In contrast, the construction pipeline saw over 4 million square feet of industrial space in development during 2022, highlighting a previously robust expansion period.
Despite recent fluctuations, local brokers predict that the market will continue to experience consistent demand, with steady leasing activity expected if broader economic conditions remain stable. The primary drivers behind this demand for industrial space in Northeast Ohio include sectors such as manufacturing, logistics, and food distribution.
Overall, the data reflects a resilient industrial market in Greater Cleveland, which, despite facing some macroeconomic uncertainty, has managed to maintain a low vacancy rate and continues to attract interest in leasing and development.
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Additional Resources
- Crain’s Cleveland: Cleveland Industrial Real Estate Market Eases
- Wikipedia: Real Estate
- Cleveland.com: Famous Supply Moving Distribution Center
- Google Search: Cleveland Industrial Real Estate
- Crain’s Cleveland: GOJO Maker Purell to Expand
- Encyclopedia Britannica: Industrial Real Estate
- Candy’s Dirt: Maple Heights Place
- Google News: Cleveland Industrial Real Estate
Author: STAFF HERE CLEVELAND WRITER
CLEVELAND STAFF WRITER The CLEVELAND STAFF WRITER represents the seasoned team at HERECleveland.com, your premier source for actionable local news and information in Cleveland, Cuyahoga County, and beyond, delivering "news you can use" with in-depth coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news impacting the region—backed by years of expert reporting and robust community input, including local press releases and business updates, while providing top reporting on high-profile events like the Rock and Roll Hall of Fame inductions, Cleveland International Film Festival, and holiday parades, alongside key organizations such as the Cleveland Clinic, Cleveland Orchestra, and Great Lakes Science Center, plus leading businesses in manufacturing and healthcare like Sherwin-Williams and University Hospitals, and as part of the broader HERE network including HEREDayton.com, offering comprehensive, credible insights into Ohio's vibrant landscape. HERE Cleveland HERE Dayton
