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    2021 Q2 Market Snapshot for the Cleveland, OH Office Market


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    2021 Q2 Market Snapshot for the Cleveland, OH Office Market

    Economic and Demographic Update

    Population: The population in Cleveland in the 2Q of 2021 was 2,029,905. This represents a decrease in total population of 16,152 over the course of the last year. During 2020 Q2, the Cleveland population stood at 2,046,057. The number of people employed rose to 1,029,155 in 2021 Q2 from 1,016,995 over the last quarter, an increase of 12,160 or 1.20% for the period.

    Median Income: The median household income for Cleveland in the 2Q of 2021 was $61,996. At this time last year, the median household income was $58,330. 2021 Q2 median income represents a quarter-over-quarter increase of 1.19% and a year-over-year increase of 6.28%. Cleveland has a median household income lower than the U.S. average, which is $73,652.

    Current and Historical Data Review (Rates PSF, Vacancy)

    Office leasing: Overall office base rent rates have remained the same. In 2021 Q1 and this most recent quarter, office base rents were $17.13/SF. Office rates dropped in 2021 Q2 when compared to last year’s quarter, when office base rent was $17.31/SF.

    Vacancy rates also went from 7.80% to 8.00%. They stood at 6.90% this time last year. During that same period, the vacancy rate is expected to change from 8.00% to 8.20% next quarter.

    In the Cleveland market’s central business district (CBD) specifically, 2021 Q2 base rents stood at $21.11/SF, an increase from $21.05/SF in 2021 Q1. When compared to last year’s quarter, CBD office rates decreased from $21.62. 

    CBD vacancy rates went from 8.42% to 9.07%. Throughout 2021 Q3, the CBD vacancy rate is expected to decrease to 8.98%. 

    Office Sales Metrics (Cap Rates, Volume, Average Price PSF)

    For investors, the cap rate during 2021 Q2 was 9.60%, compared to the previous quarter’s cap rate of 14.70%. The cap rate was 8.70% this quarter last year.

    In terms of transaction volume, there were 38 sales transactions during the period. That’s a decrease compared to the 40 transactions in the previous period. Last year at this time, there were 37 transactions. In terms of transaction amounts, office transactions were valued at $8,491,947 in 2021 Q2. That’s a decrease compared to $51,281,940 of transaction value in the previous period. Last year at this time, office transactions were valued at $34,561,712

    Industrial Leasing Metrics (Rates PSF, Vacancy)

    Industrial leasing: For the Cleveland, OH industrial sector, we look at warehouse and distribution spaces specifically. Overall warehouse and distribution base rent rates have increased by $0.05/SF. Rates went from $5.19 in 2021 Q1 to $5.24/SF in this most recent quarter. Warehouse and distribution rates grew in 2021 Q2 when compared to last year’s quarter, when industrial base rent was $5.08/SF.

    Vacancy rates remained the same at 4.70%. Next quarter, the vacancy rate is expected to reach 4.90%.

    Industrial Sales Metrics (Cap Rates, Volume)

    In terms of sales volume, industrial transactions were valued at $74,086,448 during the quarter. That’s a decrease compared to $140,294,928 of transaction value in the previous quarter. Last year at this time, industrial sales transactions totaled $28,709,956.

    Questions about the report and what this means for your commercial real estate strategy? Connect with an Allegro expert today.

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    All data aggregated in this report is provided by CoStar Realty Information Inc. CoStar is a provider of information, analytics and marketing services to the commercial property industry in the United States, Canada, the United Kingdom, France, Germany, and Spain.

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