An in-depth look at the Cleveland industrial market. Analysis includes leasing, sales, construction and employment.

1. JLL Research
Cleveland | Q1 2017
Industrial
Outlook
An in-depth look at the
Cleveland industrial
market. Analysis includes
leasing, sales, construction
and employment.

2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Insight
Cleveland Industrial Outlook
Local industrial trends remained constant through the first quarter with
vacancy holding around 9.0 percent, asking rents increases approximately 2.0
percent year-over-year, and close to 1.0 million square feet of product under
construction. Modern bulk availability remains quite limited, forcing many
users to look at build-to-suit or owner-occupier arrangements. Speculative
projects recently completed or currently under construction are seeing very
high levels of preleasing. Prime examples include the Cornerstone Business
Park in Twinsburg that Scannell is developing along with the Seasons
Business Center in Stow that Fogg and Brennan are developing.
Demand for industrial space remains high and is growing. Large companies
like Stemco and ABB are constructing technologically advanced research and
development facilities. Others, such as Cornwell Quality Tools, Lubrizol, and
Hillcrest Food Service, are expanding their warehouse and distribution
operations. But many companies find the cost of construction prohibitive and
are biding their time as they search for affordable facilities.
Average lease rates are steadily rising due to the shortage of supply and
increased market-wide demand. While reasonable tenant improvement
allowances and free rent are available, the gap between asking and taking
rents is shrinking. As occupancy rates increase, net effective rents will
approach premium levels.
Outlook
These supply, demand, and pricing trends will continue through 2017. There is
a real need for additional supply throughout the market. Current availability
of modern bulk will continue to dwindle, increasing relevant demand and
prices. Additional developers entering the market would be a welcome sign.
An increase in the number of speculative developments would help uncap
business expansion plans and create greater competition in the marketplace.
Fundamentals Forecast
YTD net absorption -396,818 s.f. ▲
QTD net absorption -396,818 s.f. ▲
Under construction 998,000 s.f. ▶
Total vacancy 9.0% ▼
Average asking rent (NNN) $3.87 p.s.f. ▲
Tenant improvements Falling ▼
-1,000,000
1,000,000
3,000,000
5,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Spec projects continue to see success, will additional
developers enter the market and create competition?
9.8%
9.1% 9.0% 8.9% 9.0%
8.5%
9.0%
9.5%
10.0%
2013 2014 2015 2016 YTD
2017
Total vacancy
• Availability of Class A warehouse space is decreasing throughout the
region. Developers are providing new facilities, but they are not
delivering at the pace or quantity needed.
• Demand for both existing and new facilities is strong and continues to
grow steadily across all markets and sectors.
• Lease rates continue to rise due to high demand and low availability.
Expect this trend to persist until there is considerable development.
$2.25
$3.25
$4.25
2013 2014 2015 2016 2017
Average asking rents ($/s.f.)
W&D Manufacturing

3. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Statistics
Cleveland Industrial Outlook
Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
availability
(s.f.)
Total
availability
(%)
Average
asking rent
($p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
ClevelandTotals
Warehouse & Distribution 181,232,334 -135,062 -0.1% 16,583,304 9.2% $3.95 114,000 651,000
Manufacturing 154,935,711 -261,756 -0.2% 13,646,662 8.8% $3.72 0 347,000
Totals 336,168,045 -396,818 -0.1% 30,229,966 9.0% $3.87 114,000 998,000
Flex 22,444,812 -52,526 -0.2% 3,031,982 13.5% $10.05 20,000 0
Downtown
Warehouse & Distribution 16,853,566 -106,610 -0.6% 2,506,538 14.9% $2.92 0 0
Manufacturing 19,095,368 249,751 1.3% 3,088,134 16.2% $3.76 0 0
Totals 35,948,934 143,141 0.4% 5,594,672 15.6% $3.38 0 0
Flex 1,538,927 -20,286 -1.3% 326,005 21.2% $14.00 0 0
East
Warehouse & Distribution 1,966,066 4,506 0.2% 96,705 4.9% $6.72 0 0
Manufacturing 1,958,750 136 0.0% 54,932 2.8% $4.50 0 0
Totals 3,924,816 4,642 0.1% 151,637 3.9% $5.92 0 0
Flex 1,890,663 7,122 0.4% 263,082 13.9% $10.86 0 0
Medina County
Warehouse & Distribution 10,715,124 32,001 0.3% 894,818 8.4% $4.30 0 257,000
Manufacturing 6,150,452 18,752 0.3% 504,691 8.2% $4.89 0 0
Totals 16,865,576 50,753 0.3% 1,399,509 8.3% $4.51 0 257,000
Flex 1,220,781 7,057 0.6% 159,205 13.0% $7.91 0 0
Northeast
Warehouse & Distribution 21,494,600 -55,004 -0.3% 1,935,074 9.0% $3.20 0 0
Manufacturing 31,719,630 -140,138 -0.4% 2,374,483 7.5% $3.59 0 0
Totals 53,214,230 -195,142 -0.4% 4,309,557 8.1% $3.41 0 0
Flex 2,006,641 -25,344 -1.3% 319,602 15.9% $12.97 0 0
South
Warehouse & Distribution 11,979,660 38,079 0.3% 1,153,737 9.6% $5.81 0 0
Manufacturing 10,307,906 98,784 1.0% 495,290 4.8% $4.09 0 0
Totals 22,287,566 136,863 0.6% 1,649,027 7.4% $5.29 0 0
Flex 3,377,624 44,832 1.3% 471,517 14.0% $9.23 0 0
Southeast
Warehouse & Distribution 43,531,755 -389,949 -0.9% 3,929,955 9.0% $4.37 0 394,000
Manufacturing 20,624,625 -13,888 -0.1% 1,313,983 6.4% $4.07 0 0
Totals 64,156,380 -403,837 -0.6% 5,243,938 8.2% $4.29 0 394,000
Flex 5,964,124 -44,257 -0.7% 852,107 14.3% $9.50 0 0
Southwest
Warehouse & Distribution 20,016,416 -163,637 -0.8% 1,780,139 8.9% $3.69 0 0
Manufacturing 17,316,495 -143,979 -0.8% 952,788 5.5% $3.81 0 0
Totals 37,332,911 -307,616 -0.8% 2,732,927 7.3% $3.73 0 0
Flex 2,907,441 23,371 0.8% 181,781 6.3% $9.69 0 0
Summit County
Warehouse & Distribution 35,510,955 224,515 0.6% 2,256,725 6.4% $4.38 114,000 0
Manufacturing 24,503,813 -78,032 -0.3% 3,493,604 14.3% $3.54 0 0
Totals 60,014,768 146,483 0.2% 5,750,329 9.6% $3.87 114,000 0
Flex 2,698,980 -14,109 -0.5% 360,641 13.4% $10.17 20,000 0
West
Warehouse & Distribution 19,177,131 273,140 1.4% 2,051,181 10.7% $3.92 0 0
Manufacturing 23,887,903 -253,142 -1.1% 1,336,657 5.6% $3.03 0 347,000
Totals 43,065,034 19,998 0.0% 3,387,838 7.9% $3.57 0 347,000
Flex 1,075,446 -9,712 -0.9% 90,327 8.4% $9.31 0 0

4. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Construction
Cleveland Industrial Outlook
Address: 125 Hudson Crossing
Building size: 125,000 s.f.
Tenant: Confidential (125,000 s.f.)
Owner: Premier Development
Build type: Spec. warehouse
Est. completion: Q2 2017
Address: 38889 Center Ridge
Building size: 347,000 s.f.
Tenant: Riddell (347,000 s.f.)
Owner: Scannell
Build type: BTS manufacturing
Est. completion: Q2 2017
Address: 14720 Foltz Industrial
Building size: 186,000 s.f.
Tenants: XL Screw (47,000 s.f.)
JLL client (116,000 s.f.)
Owner: Scannell
Build type: Spec. warehouse
Completed: Q4 2016
Address: 542 Seasons Road
Building size: 114,000 s.f.
Tenants: Wheel Pros (35,000 s.f.)
JLL client (75,000 s.f.)
Owner: JV- Brennan, Fogg
Build type: Spec. warehouse
Est. completion: Q2 2017
Completed: Q1 2017
Address: 2000 Aurora Road
Building Size: 248,000 s.f.
Tenant: Amazon (248,000 s.f.)
Owner: Scannell
Build type: BTS warehouse

5. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Sales
Cleveland Industrial Outlook
This report analyzes all industrial sales completed in the last 12 months ≥ 30,000 s.f.
Top 10 sales transactions during the last 12 months
Size (s.f.) $ p.s.f. Sale date
333,215 $182 Jan-17
86,850 $115 Aug-16
100,040 $65 Feb-17
170,550 $62 Apr-16
222,900 $57 Jun-16
56,710 $57 Jul-16
381,528 $51 Apr-16
61,700 $51 Apr-16
100,000 $50 Sep-16
166,945 $49 Apr-16
13000 Darice Parkway AIC Ventures Pat Catan's $19,500,000
687 Seville Road STNL Property Corporation Prohrer Corporation $8,123,640
7925 Empire Parkway WP Carey REIT Forterra Building Products $33,130,624
22720 Steltfast Parkway Protech US Holding PrimeSource Building Products $5,000,000
261 Southwest Avenue AIC Ventures The Schipper Group $12,800,000
12665 Corporate Drive Cavaliers Operating Company Timothy Gotz $3,250,000
7201 Industrial Park Boulevard PMI Operating Company Performance Motorsports Int'l $6,454,000
12850 Darice Parkway AIC Ventures Pat Catan's $10,611,496
1425 Rockwell Avenue H5 Capital BYTEGRID Holdings $60,675,000
1000 Seville Road Capstone Limited James Doyle $9,950,000
Building address Buyer company Seller company Sales price
Average price per square footSales volume (s.f.)
$33
Average manufacturing price ($
p.s.f.)
$22
Transactions details
Average flex price ($ p.s.f.) $79
12 months at a glance Sales activity by building type
Total volume ($) $238,935,365
Total volume (s.f.) 6,456,712 s.f.
Number of transactions 50
Average warehouse price ($ p.s.f.)
$22
$43
$63
$3
$32 $33
$41
$23
$35
$0 $0
$20
$48
$8
$0
$16
$30
$10
$182
$0 $0 $0 $0
$43
$0
$11
$0
$0
$25
$50
$75
$100
$125
$150
$175
$200
Downtown East Medina Northeast South Southeast Southwest Summit West
Warehouse/Distribution Manufacturing Flex
0 800,000 1,600,000
West
Summit
Southwest
Southeast
South
Northeast
Medina
East
Downtown
Warehouse/Distribution Manufacturing Flex
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Warehouse / Distribution Manufacturing Flex
Sum of Price ($) Sum of RBA (SF)Sum of price ($) Sum of RBA (s.f.)

6. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
20%
18%
14%13%
12%
9%
6%
Educational & Health Services
Trade, Transportation & Utilities
Professional & Business Services
Government
Manufacturing
Leisure & Hospitality
Financial Activities
Other Services
Mining, Logging & Construction
Information
Q1 2017
Employment
Cleveland Industrial Outlook
4.7%U.S. unemployment
1.7%U.S. 12-month job growth
6.6%Cleveland unemployment
.4%Cleveland 12-month job growth
5.0%Ohio unemployment
0.6%Ohio 12-month job growth
0.0%
0.7%
1.4%
2.1%
2.8%
2013 2014 2015 2016 2017
Cleveland U.S.
-4,900
-600
-300
200
700
700
800
2,200
3,700
8,400
-10,000-8,000-6,000-4,000-2,000 0 2,000 4,000 6,000 8,00010,000
Manufacturing
Professional & Business Services
Information
Mining, Logging & Construction
Trade, Transportation & Utilities
Other Services
Financial Activities
Government
Leisure & Hospitality
Educational & Health Services
-5.0
0.0
5.0
10.0
2013 2014 2015 2016 2017
Professional & Business Services Information
Government Financial Activities
0%
4%
8%
12%
900,000
1,000,000
1,100,000
2013 2014 2015 2016 2017
Employment Unemployment
Employment vs. unemployment rate
Employment by industry Office employment trends (12-month change, 000s)
Job growth by sector (12-month change)
Job growth (12-month change)
Job growth by sector (12-month change)

7. © 2017 Jones Lang LaSalle IP, Inc.
All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Andrew Batson
Vice President, Director of Research
+1 216 937 4374
andrew.batson@am.jll.com
Noah Bill
Research Analyst
+1 216 937 4381
noah.bill@am.jll.com
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. A
Fortune 500 company, JLL helps real estate owners,
occupiers and investors achieve their business ambitions.
In 2016, JLL had revenue of $6.8 billion and fee revenue of
$5.8 billion and, on behalf of clients, managed 4.4 billion
square feet, or 409 million square meters, and completed
sales acquisitions and finance transactions of
approximately $136 billion. At year-end 2016, JLL had
nearly 300 corporate offices, operations in over 80
countries and a global workforce of more than 77,000. As
of December 31, 2016, LaSalle Investment Management
has $60.1 billion of real estate under asset management.
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Jones Lang LaSalle Incorporated. For further information,
visit www.jll.com.
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