Presentation slides of the Draft Market Assessment shown at the second advisory committee meeting for the STEP UP DOWNTOWN project on April 16, 2014.

1. 2014 Market
Assessment
DRAFT FINDINGS – APRIL 2014

2. Process for the Market Assessment
 Assessment to identify
opportunities through next
investment cycle (5 to 7 years) and
inform “Step Up” plan
 Primary and secondary data
sources
 Stakeholder interviews – real
estate, investment & economic
development

3. Market Assessment Document
 Top Global Trends in Effect in
Cleveland
 Market Opportunities in this
Investment Cycle
 Key Market Indicators in
Cleveland

4. Global Trends in Effect in Cleveland

5. Top Global Trends in Effect
 Need for skilled talent is driving
businesses to compact urban centers
◦ Millennials today 36% of US workforce, 50% by 2020
 Millennials & empty nest Boomers want
to live downtown
◦ 40% increase in Downtown Cleveland residents
 Changing workforce demographics also
include women
◦ Focus on safety, mixed-use & cultural diversity

6. Top Global Trends in Effect
 Demand for Mobility Options
◦ Downtown Walk Score 87; Transit: 82; Bike 52.
 Health & Wellness Opportunity for
Cleveland
◦ Both Industries and Lifestyle Preferences
 Social Equity a Growing National
Concern
◦ Downtown as a common gathering place, inviting
and welcoming to all

7. Current Market Opportunities

8. Residential: Strong & Sustained
 Residential is driving the current investment cycle
 800+ units added w/o increasing vacancy rate
 2,000 more units online by 2015 growing
downtown population to 15,000
 Remaining tax credit eligible properties could
supply another 2,000 to 2,500 units – will be
absorbed this cycle?
 Demand for resident-serving amenities

9. Office & Retail: Niche Opportunities
OFFICE
Overall 18% vacancy / $17 rates
“Super A” niche:
◦ Modern formats / smaller footprints
◦ Regional retention
◦ 8-9% vacancy & ~$30 leasing rates
◦ May support additional new build
Entrepreneurial niche
◦ Street level retail conversions
◦ Co-working space
RETAIL
Oversupply - contracting nationally
Consolidate in key activity centers &
pedestrian connectors
Niche opportunities
◦ General Merchandise $16.5 leakage
◦ Resident & worker-serving personal services
◦ Visitor-serving near convention center
◦ Health & fitness related

10. Visitor: Building Out
 $465M investments in Convention Center &
Global Center for Health Innovation
 Playhouse Square expansion &
enhancements
 1,800 new hotel rooms in progress/planned
 Revenue and occupancy numbers will be
closely watched
 Casino Phase II timing still TBD

11. Key Indicators for Downtown

12. Reasons for
Key Indicator
Recommendations
Tell the story succinctly and powerfully
 Promote & Extend Residential Demand
 Recruit & Retain Skilled Talent
 Attract & Retain Businesses
 Uncover & Promote Niche Opportunities
 Report Data Specific to Downtown

13. Residential & Worker Indicators
12,000 Downtown Residents
124,000 Downtown Workers
Resident Demographics
◦ 51% hold a Bachelor’s or Advanced Degree
◦ 74% White Collar
◦ 70& single, never married
◦ Average per capita income 64% higher than
metro average
Residential occupancy
◦ 95% for last 11 quarters
Cleveland Diversity Index: 62.1
Cleveland Cost of Living Index: 101.0
Median Annual Wage for MSA $35,610
◦ ~$0.5 M MSA workers’ salaries support
$1,000/mo
Transit Ridership Increases 2013:
◦ Light Rail: 4.6%
◦ Heavy Rail 5.7%

14. Commercial Indicators
◦ 18% overall office vacancy
◦ Asking Lease Rates Q2 2013
$19.10
◦ 37,600 net absorption 2013
◦ Regional retention of businesses
◦ “Super A” ~8-9%vacancy; $30.00
s.f. asking rate
◦ Aggregate Disposable Income:
$37.7 M
Visitor Indicators
◦ Convention Center Bookings
projected 300,000
◦ Number Hotel Beds: 3,557
◦ Hotel Occupancy: 67.2%
◦ Revenue per Available Room:
$79.33
◦ Downtown Visitor Attraction: 8.5 M
to top 5 venues

15. New: Civic Realm Indicators
Safety: Comparative Crime Rates; Availability
of Ambassadors
Mobility: Ridership; Walk score: 87; Transit:
82; Bike: 57
Connectivity: Bike Lanes/Racks; Transit
Ridership; Wifi Hotspots
Diversity& Culture: 356 Ethnic Restaurants;
36 Cultural Gardens; 1000+ Performances;
Pop-Ups & Tactical Urbanism

16. 2014 Market
Assessment
DRAFT FINDINGS – APRIL 2014