Northeast Ohio Commercial Real Estate Trends
Cushman & Wakefield | CRESCO Real Estate is the leading expert in Northeast Ohio commercial real estate trends and news. We keep our finger on the pulse of the Greater Cleveland market, and share our insights regularly with investors, tenants, buyers and sellers.
Below, take a look at five of the hottest and most relevant trends currently shaping the commercial real estate market in Northeast Ohio.
1. The Industrial Market Leads the Way
The industrial market remains one of the strongest asset classes for commercial real estate investors in Northeast Ohio. Ecommerce is one of the key drivers of this trend, as consumers increasingly shift from shopping at malls and other brick-and-mortar retail centers to online shopping. In the wake of COVID-19 social distancing, this trend is predicted to remain strong.
Warehouses and distribution centers are leading the pack in terms of overall industrial growth. Manufacturing facilities are experiencing low vacancy rates, and a growing number of small and mid-size enterprises are occupying these spaces. Within Northeast Ohio, the western markets are experiencing the lowest vacancy rates across all types of industrial properties.
2. Millennials Drive Multi-Family Housing
Demand for multi-family housing is strong throughout Northeast Ohio. This trend is supported by younger cohorts (especially Millennials, those born between 1981 and 1996) who are delaying the purchase of their first single-family home compared to previous generations.
In 2018, Pew Research found that 88% of Millennials now live in metropolitan areas. This can be partially attributed to the fact that Millennials are getting married and starting families later than older generations, meaning they require less space. Social movement and career opportunities in central business districts are also driving the multi-family housing trend.
The Downtown Cleveland Alliance projects CBD growth to 40,000 downtown residents by 2040, spurring increased development of multi-family housing and improved housing density. Notable multi-family developments in Cleveland include The May and Playhouse Square.
3. The Rise of Neighborhood Retail
There is no denying the large-scale shift from brick-and-mortar shopping to online shopping. According to a survey from the Urban Land Institute Cleveland, the majority of respondents consider the retail market to be in “early decline,” with malls in “advanced decline.”
However, neighborhood shopping centers are considered to be in a “recovery / growth” phase, spelling good news for retail businesses and investors alike. Redevelopment of existing space has enabled the retail segment to remain fresh and impactful. Consider the vibrant Van Aken District, which has been converted into a walkable mixed-use environment.
Districts that combine retail with residential, office, dining and recreational spaces are well-positioned for development and growth. As of 2019, 1.14M SF of retail space was being planned in Northeast Ohio, with vacancy rates trending downwards and retail lease rates on the rise. Retail employment is generally increasing in the Cleveland and Akron markets.
4. Hot Market: University Circle
University Circle has a lot to offer, and real estate investors are taking note. This charming district on Cleveland’s east side is one of America’s densest concentrations of cultural attractions. It is home to the Cleveland Museum of Art, Cleveland Orchestra, Cleveland Institute of Music, Cleveland Botanical Garden and other world-class cultural institutions.
A survey published by the Urban Land Institute Cleveland reported that University Circle is one of the city’s hottest sub-markets, with “good” to “excellent” prospects. This neighborhood is seeing a growing demand for new apartments and other multi-family housing, with hot opportunities for retail, office and dining as well.
5. Hot Market: Akron
The commercial real estate market in Akron, Ohio is positioned for significant growth in the coming years. New development projects are being completed at a rapid rate, especially within the healthcare, retail, office and education sectors.
Downtown Akron is an established commercial hub, while communities on the city’s outskirts (such as Ellet and West Akron) are primed for redevelopment opportunities. Capstone Development Company recently purchased the historic Akron Beacon Journal building, with plans to redevelop the property into a modern office space.
Want to learn more about how these commercial real estate trends could impact your business or investment plans? Contact Cushman & Wakefield | CRESCO Real Estate.
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